Rival Pipeline Routes Benefit Uganda

2 MINS READMar 9, 2016 | 16:24 GMT
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Rivalries in East African Pipeline Negotiations Favor Uganda

The Ugandan government is in a somewhat enviable position, primed to take advantage of competing interests in the region and exploit its own energy resources. The Tanzania Petroleum Development Corp. announced March 7 that it hoped to close negotiations with Uganda in August on a pipeline to export oil from Uganda's Lake Albert oil fields through Tanzania. The statement follows meetings between Tanzanian President John Magufuli and Ugandan President Yoweri Museveni on March 1, during which they initially agreed to build the pipeline together. It also comes after Uganda began tentative talks with Tanzania's regional rival, Kenya, to build a pipeline with similar goals through that country.

As it stands, three pipeline routes have been proposed: two in Kenya and one in Tanzania.

One pipeline would traverse northern Kenya, ending at Lamu port. The Kenyan government and Tullow Oil support this path because it crosses the company's relatively small resources, which could also feed into the pipeline. The major concern from the perspective of its primary backer, French oil company Total, is instability in eastern Kenya, where al Shabaab frequently attacks security forces and civilians. If built, the pipeline will almost certainly become a prime target for the militant group.

The other proposed pipeline would run through southern and central Kenya to Mombasa port. Although Total initially supported this proposal, it is now the least likely to succeed thanks to the momentum and support behind Tanzania's Tanga route, agreed to March 7. Of the three options, the Tanga pipeline bears the lowest security risk and is backed by Total. Consequently, Uganda now supports this pipeline more actively.

While the Tanzanian option has seen the most progress, the deal is far from finalized, and Kampala will try to pit Dar es Salaam and Nairobi against each other to see which will offer the lowest transportation costs. In the longer term, the Tanzanian route is the most likely to come to fruition since it is shortest, has the fewest security concerns and enjoys Total's backing. But even under the most optimistic scenario, Uganda remains at least three years away from oil exports and a pipeline to transport them, and it probably will not begin exporting oil until the 2020s.

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