EACOP: Strategic project for unlocking East Africa’s potential

On February 21, Tanzania, through the Energy and Water Utilities Regulatory Authority (EWURA) granted Construction Approval for East African Crude Oil Pipeline Project (EACOP); the prestigious pipeline that will transport oil produced from Kabaale – Hoima in Uganda’s Lake Albert oilfields to the Chongoleani peninsula near Tanga port in Tanzania, where the oil will then be sold onwards to world markets.

The licensed upstream oil companies that are leading the development of this pipeline in Uganda: Total Energies (62 per cent shares), CNOOC Uganda (8 per cent), Uganda National Oil Company (UNOC) [15 per cent), and the Tanzania Petroleum Development Corporation (TPDC) [15 per cent].

This approval gave a green light for the 1,443km pipeline. The first 296 km of EACOP are in Uganda, and the remaining 1147 km are in Tanzania. The pipeline will be buried thermally insulated 24 inches pipeline along with six pumping stations (two in Uganda and four in Tanzania) ending at Tanga with a Terminal and Jetty, where crude oil will be loaded onto tankers.

The pipeline will have a peak capacity of 246,000 bbls/day. This strategic project is implemented in eight regions which include Tanga, Manyara, Dodoma, Singida, Tabora, Shinyanga, Geita, and Kagera, where it is expected to provide various economic opportunities to citizens living in those regions.

Speaking at the handover ceremony, Ms Wendy Brown, EACOP General Manager Tanzanian Branch, said, “This marks another step forward for EACOP as it allows the commencement of our construction activities in Tanzania upon completion of the ongoing land access process.”

“We are grateful to the government of Tanzania for the expedited delivery of the application as per the commitment in the Host Government Agreement (HGA) and the continuous support for the implementation of the EACOP project,” she added.

Licensing Process

The construction license was required to enable EACOP to formally start on-the-ground construction activities in Tanzania as part of the development of the 24-inch diameter insulated and buried crude oil pipeline. Hence, the Issuance of the Construction Approval marks the conclusion of the processing of the application for the Construction Approval submitted to EWURA by EACOP on Thursday, 30th June 2022.

The application for the Construction Approval was made in compliance with section 126 of the Petroleum Act, Cap 392 of the Laws of Tanzania, and Rule 4 of the Petroleum (Pipeline Operations) Rules, GN No. 477 of 2015.

Minister for Energy,  January Makamba, graced the handover event, which was held at Serena Hotel, Dar es Salaam. Also in attendance were Regional Commissioners from eight regions to which the pipeline will pass, members of the Parliamentary Energy Committee, members of EWURA Board and Management, officials from EACOP, and other invited guests from the petroleum industry.

The same process was done in Uganda, where the President of  Yoweri Kaguta Museveni, witnessed the handover of the license on the 24th of January, 2023.

In Uganda, Construct the East African Crude Oil Pipeline (EACOP), the License was granted by the Minister of Energy and Mineral Development, (MEMD), Ruth Nankabirwa, at the Kingfisher Oil Fields, at Buhuka, Kyangwali, Kikuube District Ministry, following the application submitted on 1st July 2022.

This was done in compliance and accordance with Section 10 of the Petroleum (Refining, Conversion, Transmission, and Midstream Storage) Act 2013, Regulation 59 of the Petroleum (Refining, Conversion, Transmission, and Midstream Storage) Act 2016, and the East African Crude Oil Pipeline Special Provisions Act 2021 and found satisfactory.

Environmental and Social Impact Assessment

Environmental and Social Impact Assessments (ESIAs) have been completed for both Tanzania and Uganda, and certificates of approval were issued on 21st November 2019 (Tanzania) and 30 November 2020 (Uganda).  The ESIA studies were carried out by JSB & COWI in Tanzania and Eco & Partner in Uganda in collaboration with an international consultant, RSK from the UK, in both countries.

In addition to complying with national regulatory requirements, EACOP is adhering to international Environmental and Social requirements, specifically the Equator Principles and the IFC Performance Standards.  These constitute a global management framework to identify, assess and manage environmental and social risks in Projects. The Equator Principles are aligned with the IFC Performance Standards and require compliance with those standards by Projects.

The purpose of the ESIA is to assess and predict potential adverse social and environmental impacts and to develop suitable mitigation measures, which are then documented in an Environmental and Social Management Plan (ESMP). The ESIA is the process that defines and evaluates the potential social and environmental impacts of a given project and their mitigation measures and includes environmental and social baseline studies.

From site selection, EACOP worked with environmental and social experts on the ESIA in compliance with national regulatory requirements and international best practices, including the International Finance Corporation’s (IFC) Performance standards (PS). The ESIA process progressed interactively with project planning and design. During the ESIA process, impacts that could be avoided during the design phase were identified iteratively through interaction with engineering. The identification of additional avoidance opportunities will continue through the construction phase.

Engagement with National, district, and local stakeholders (including non-governmental organizations) was undertaken throughout the ESIA process, and results were used to assess impacts and the identification of mitigation measures. Engagement continues as the project moves forward for monitoring purposes and to capture new developments in the social landscape.

The company declares its readiness to continue to conduct additional studies to further refine and deepen our understanding of the diverse environmental and social elements along the pipeline route. This includes a critical habitat assessment

Opportunities 

The construction of the EACOP Pipeline, in combination with the Tilenga and Kingfisher projects, is expected to benefit the economies of Uganda and Tanzania, including tax revenues for the two Host Governments, job creation, national content, new infrastructure, logistics, skills and technology transfer and enhancement of the trade corridor between Uganda and Tanzania.

Moreover, the pipeline is expected to attract Foreign Direct Investment; the capital investment of some $4bn associated with the construction of the Pipeline represents one of the largest ever inward investments into Uganda and Tanzania.

It is quite obvious, EACOP will increase employment; it is expected during the construction phase, the pipeline will create short-term (2-3 years) employment for both skilled and semi-skilled professionals.  In addition, casual workers will be involved in the construction phase of the project, sourced locally from each district.

The project will contribute towards the enhancement of the central corridor between Uganda and Tanzania, triggering the development of better road infrastructure, improved logistics, and modern communications with fiber-optic cable. Hence, this is a critical investment to be considered an integral factor for the enhancement of the central trade corridor. Further, Operators and Technicians will be trained and deployed for the operational phase.

According to the plan, the project offers vast business opportunities. EACOP and its Level 1 Contractors will seek to maximize goods and services provided by companies in both Uganda and Tanzania and will publish Expressions of Interest in Local Newspapers to advertise these opportunities.  EACOP will work with its Local and National Contractors to help them to raise standards.

Mr Ahmed is a seasoned author on development and economic issues. He is among the first delegates who attended the Bloomberg Media Initiative Africa (BMIA) Financial Journalism Training (FJT) Program Intake 1 in Tanzania.

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