Uganda and Tanzania signed an agreement on their proposed $3.55 billion crude export pipeline on Friday, a key milestone for the project which is expected to start pumping Ugandan oil to international markets in three years.
An official at Uganda’s Ministry of Energy told Reuters the agreement covered terms on tax incentives for the project, implementation timelines, the size of the pipeline and local content levels.
Adewale Fayemi, the manager for Uganda at Total, said the project will become “the longest electrically heated crude oil pipeline in the world”.
“It’s a record,” he told Reuters, adding it will open a new phase of economic development in the region when completed.
The pipeline will be heated so it can keep the highly viscous crude liquid enough to flow.
Total is one of the owners of Ugandan oilfields, alongside China’s Cnooc and Britain’s Tullow Oil.
Total has said it is willing to fund the pipeline’s construction but has not what stake it will own in the project.
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.
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.