In line with the Memorandum of Understanding (MoU) on commercialisation of the discovered petroleum resources in Uganda, feasibility studies on the development of a crude oil export pipeline from the Albertine Graben in Uganda to the East African Coast were undertaken with a view of selecting the least cost route for transporting Uganda’s crude oil to the international oil markets. The Hoima (Uganda) – Tanga (Tanzania) route was found to be the most economic and robust route option since it was more secure, has less constructability and logistical constraints, and had an already operational port, hence resulting in the lowest possible tariff. This was the birth of the East African Crude Oil Pipeline (EACOP) project.
The EACOP project is a development project for a one thousand, four hundred and forty-three (1,443)-kilometre heated, insulated, and buried crude oil export pipeline starting at Kabaale, Hoima District, in Uganda and terminating at a Marine Storage Terminal and Load Out Facility at Chongoleani, Tanga District in Tanzania, linking the Albertine Graben in Uganda to the international oil market. The pipeline is designed to transport two hundred sixteen thousand (216,000) barrels of crude oil per day, with a ramp up of up to two hundred forty-six thousand (246,000) barrels of crude oil per day.
The EACOP project is being developed, and will be operated by EACOP Ltd, a company composed of TotalEnergies SE, UNOC, the Tanzania Petroleum Development Corporation (TPDC) and the China National Offshore Oil Company (CNOOC).
LEGAL FRAMEWORK
An Inter-Governmental Agreement between Governments of Uganda and the United Republic of Tanzania was signed on 26th May 2017, laying out a framework on how the two (2) States will work together to facilitate the development of the EACOP project. Subsequently, foundation stones for the EACOP were laid both in Tanga and Hoima in August 2017 and November 2017 respectively.
Negotiations of a Host Government Agreement (HGA) between the Government of Uganda and EACOP Ltd commenced in February 2018 and were concluded in September 2020. This was followed by the negotiation of the Transportation and Tariff Agreement (TTA) between EACOP Ltd, Government of Uganda, TEPU, and CNOOC to agree on the commercial arrangements on paying transportation tariffs, and the Shareholders Agreement (SHA) between TotalEnergies SE, UNOC, TPDC and CNOOC to agree on the respective shareholding and management of the EACOP Ltd. This culminated in the signing of the Uganda HGA, SHA and TTA on 11th of April 2021, hence the launch of Uganda’s Oil and Gas(O&G) projects.
An EACOP Special Provisions Act (2021) was enacted in December 2021 to facilitate the implementation of the EACOP project in Uganda.
The Minister, MEMD with Members of Parliament (MPs) and Government officials after the passing of the EACOPSpecial Provisions Bill.
On 1st February 2022, EACOP Ltd, together with the Upstream Oil Companies TEPU and CNOOC announced that they had made the Final Investment Decision (FID) to develop Uganda’s O&G projects.
REGIONAL COOPERATIONS
In line with the IGA, the Petroleum Authority of Uganda (PAU) and the Energy and Water Utilities Regulatory Authority (EWURA) of Tanzania signed an MoU in 2019 to cooperate in the regulation of the EACOP project activities. This cooperation will facilitate the development of this cross-border project.
EACOP PROJECT IMPLEMENTATION
EACOP Ltd was granted a licence to construct the pipeline in Uganda, on 25th January 2023. This followed the submission of the application for the licence by EACOP ltd on 1st July 2022.
On 21st February 2023, EWURA granted EACOP Ltd a construction permit to construct the pipeline in Tanzania.
The Engineering, Procurement, and Construction Management (EPCM) activities for the EACOP project continue to be undertaken by Worley with its local subcontractors (ICS in Uganda and Norplan in Tanzania) in Uganda, Tanzania and London.
China Petroleum Pipeline Engineering Company Ltd (CPP), was contracted to construct the Pipeline and Above the Ground Installations (AGI) in Uganda and Tanzania. CPP undertook a pre-construction survey of the whole EACOP route and AGI locations in March and April 2022.
Early civil works, which consist of vegetation clearing, cutting and filling, and land grading are underway on the EACOP camps called the Main Camps and Pipe Yards (MCPYs) in Tanzania and on the area of the Thermal Insulation Facility at Nsojo, Nzega district, Tanzania. The early civil works at the thermal insulation facility are being undertaken by Milembe.
Additionally, ISOAF – the Thermal Insulation System (TIS) contractor – commenced the construction of the Thermal Insulation Facility, which will be used to insulate all the line pipes to be used on the EACOP and the Tilenga feeder line. This facility is located at Nsojo, Nzega district in Tabora region.
Daqing Oilfield Construction Group Company Ltd (DOCG) was awarded the contract for the design and construction of the terminal and the storage tanks at Tanga. The contractor is currently finalizing geotechnical drilling activities at the tank locations.
In Uganda, the EACOP will traverse ten (10) Districts, namely Hoima, Kikuube, Kakumiro, Kyankwanzi, Mubende, Gomba, Sembabule, Lwengo, Kyotera and Rakai, for a total distance of two hundred ninety-six (296) kilometres. The thirty (30) meter -wide corridor stretching for two hundred, ninety-six (296) km, with the land required for the four (4) camps and two (2) pump stations, will take up two thousand seven hundred forty (2,740) acres of land and affect three thousand six hundred forty-eight (3,648) people – the Project Affected Persons (PAPs). One hundred ninety-one (191) PAPs are primary residents who have opted for resettlement houses.
The overall compensation of PAPs as of 31st January 2023 was two thousand, four hundred, sixty-eight (2,468) out of three thousand, five hundred, ten (3,510) PAPs on the Right of Way representing 70% of the total number of PAPs eligible for compensation. In addition, a total of two thousand, seven hundred, fifty-seven (2,757) out of out of three thousand, five hundred, ten (3, 510) PAPs signed their Compensation Agreements representing 78.5%. The Petroleum Authority of Uganda is monitoring the land acquisition activities to ensure that the process is fair and transparent.
In Tanzania, the EACOP project will traverse twenty-three (23) Districts, namely, Missenyi, Bukoba, Muleba, Biharamulo, Chato, Geita, Mbogwe, Bukombe, Kahama, Nzega, Igunga, Iramba, Mkalama, Singida, Kondoa, Chemba, Hanang, Kiteto, Kilindi, Handeni, Korogwe, Muheza, and Tanga, and cover a distance of one thousand one hundred forty-seven (1,147) kilometres. The thirty (30) metre-wide corridor running for one thousand, one hundred, forty-seven (1,147) km, plus the land-take of the four (4) pump stations, two (2) pressure reduction stations, the marine storage terminal, the twelve (12) camps and the thermal insulation facility will take up ten thousand eighty-one (10,081) acres. This will affect a total of nine thousand five hundred thirteen (9,513) people – the PAPs.
ENVIRONMENT STUDIES
The EACOP Environmental and Social Impact Assessment (ESIA) report for Uganda was submitted to NEMA in January 2019. The PAU organised ten (10) public dialogues across in all the Districts traversed by the EACOP, and three (3) Public Hearings that were held in Kakumiro, Mubende, and Rakai Districts in November 2019. The ESIA report was updated and resubmitted to NEMA, and the ESIA certificate issued in December 2020.
