Roundup: Uganda weighs Kenya, Tanzania options for oil pipeline construction

Ugandan President Yoweri Museveni is scheduled to travel to neighboring Kenya on Monday where he will meet his counterpart Uhuru Kenyatta for negotiations about the construction of a crude oil pipeline.

The two leaders met last year in Uganda where they agreed that the development of a crude oil pipeline is needed to be implemented expeditiously to avoid any further delay in commercial exploitation of Uganda's petroleum resource.

The current Museveni-Kenyatta meeting comes after Tanzania's President John Magufuli on March 1 announced that he had agreed with Museveni that the oil pipeline would be constructed linking Uganda's oil wells to Tanzania's port of Tanga.

Museveni and Magufuli had just concluded a meeting in which the line ministers signed agreements paving way for the construction of the pipeline.

The proposed Uganda-Tanzania pipeline, 1,410 km in length, will employ about 1,500 people directly, according to the Tanzanian government.

Tanzania's announcement came as a surprise because it was the first time the proposal of constructing a pipeline through Tanzania from Uganda was being announced. What has been on the table is the Kenyan proposal.

Uganda has been negotiating with Kenya for long regarding the construction of the crude oil pipeline.

The proposals by Kenya are two. One is to construct the pipeline from western Uganda through northern Kenya to Lamu Port, Kenya. This path will serve Uganda, Kenya, South Sudan, and potentially Ethiopia. This seems to be the preferable route in the negotiations between Uganda and Kenya.

The second option by Kenya is to construct the pipeline through the Kenyan capital Nairobi to the seaport of Mombasa. Although this offers a cheaper option, it would require, according to Ugandan officials, to displace hundreds of residents along the route.

Analysts have argued that although the northern Kenyan route seems the preferable, it faces the challenge of insecurity due to its neighborliness to Somalia, which is facing the militant group Al Shabaab.

Kenya and Tanzania have self-gains in the proposed construction. Kenya is exploring for oil in its northern part while Tanzania is also exploring for oil in its central part meaning that they stand to benefit from the construction.

Uganda now has to weigh in which options it will take between Kenya and Tanzania without severing their ties under the regional economic bloc East African Community (EAC). EAC brings together Kenya, Tanzania, Uganda, Rwanda, Burundi and South Sudan.

Uganda is seeking a route that will result in the lowest unit transportation cost and constitute the most viable option for the pipeline project.

"If we can be able to get the least costly pipeline route to the East African Coast, our crude oil will be exported cheaply,'' said Kabagambe Kaliisa, permanent secretary of Uganda's ministry of energy and mineral development.

Uganda plans to start drilling its so far 6.5 billion barrels of oil reserves from the Albertine region in the western part of the country.

The country plans to refine some of the oil while the rest of the crude will be transported to the East African coast for export.

Although the country wanted to refine all the oil, it was put under pressure from international oil companies to partially export the crude. The companies had originally argued that all the crude be exported but Uganda refused to bow down.

Tullow, Total and China National Offshore Oil Corporation are the oil companies operating the oil wells in western Uganda. Endit