Reply to Southern Man....Kenya, Uganda oil pipeline deal still on course
October 19, 2015
By Nicholas Nduati
.
The Ugandan government says it is not abandoning the Kenyan route for its Pipeline in favor of Tanzania.
According to Uganda’s Energy Minister Irene Muloni, the deal with Tanzania to explore the possibility of building a crude oil pipeline between the two countries does not rule out the Kenyan route noting that the her country was exploring the least cost possible route for the oil pipeline.
Kenya and Uganda since August this year had started working on modalities of financing a 1,500km oil pipeline route from Hoima in Uganda through Lokichar in Northern Kenya to the Lamu.
Uganda’s decision to sign an MOU with Tanzania aimed at exploring the possibility of building a crude oil pipeline between the two countries has left the Kenyan deal hanging in the balance.
Muloni said the Kenyan route had not been abandoned but rather Uganda was looking for the least cost possible route for the oil pipeline.
The Ugandan minister further said that a cheaper route would generate more returns for her country and ensure that the crude oil has value key to this being the cost of oil transportation via the pipeline.
Although Uganda said in August it had agreed on the Kenyan route, it said Kenya had to guarantee security for the pipeline, along with offering cheaper financing than the alternative countries.
The Kenyan route has raised some industry concerns because it would run in the North Eastern region where security concerns have been raised as well as near the border with Somalia from where the Al-Shabaab has previously launched attacks.
Settling for a route through Tanzania could slow some projects in Kenya, which are planned to run alongside the pipeline on the Northern Lamu corridor, where Kenya plans to build a new port to serve the region.
AI
