Uganda and Tanzania award crude pipeline design contract to U.S. firm

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KAMPALA (Reuters) – Uganda and Tanzania have awarded a contract for designing a crude oil pipeline running through both east African countries to U.S. based firm Gulf Interstate Engineering, an official document seen by Reuters on Wednesday showed.

Early last year, Uganda agreed with Tanzania to jointly develop a $3.55 billion pipeline to help ship Uganda’s crude to international markets.

The 1,445 km pipeline will start in landlocked Uganda’s western region, where crude reserves were discovered in 2006, and terminate at Tanzania’s Indian Ocean seaport of Tanga.

The statement by Uganda’s Ministry of Energy and Mineral Development showed the contract for the Front-End Engineering Design (FEED) was awarded to Houston, U.S.-based Gulf Interstate Engineering last month.

Among the tasks, the firm’s contract involves helping with “project construction specifications,” a plan for project execution, the implementation schedule and writing bid documents for a process to select a contractor to develop the pipeline.

Uganda estimates overall crude reserves at 6.5 billion barrels, while recoverable reserves are seen at between 1.4 billion and 1.7 billion barrels.

French oil major Total, has said it is willing to fund the project but has not stated whether it wants to fully or partially own it.

Total owns fields in Uganda alongside China’s CNOOC and London-listed Tullow Oil, which also operates in Kenya.

Gulf is expected to do the work in eight months, paving the way for work on the pipeline to begin, with crude production expected to start in 2020.


(Reporting by Elias Biryabarema; Editing by George Obulutsa and Mark Potter)

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