The East African Crude Oil Pipeline is a 1,445km crude oil export pipeline that will transport Uganda’s crude oil from Kabaale – Hoima in Uganda to the Chongoleani peninsula near Tanga port in Tanzania
Due to the viscous and waxy nature of Uganda’s crude oil, the pipeline will need to be heated along the entire route, making the EACOP the longest electrically heated pipeline in the world.
The Governments of Uganda and of Tanzania have signed the Inter Governmental Agreement (IGA) for the pipeline Project. The signing of the IGA is a significant milestone that provides the foundation for the project as well as for other project agreements, including the Host Government Agreements, Shareholders’ Agreements and the Financing Agreements. This agreement marks the decision of the two countries to embark on developing the pipeline. The implementation of the EACOP project has already started on the ground with various technical, environmental and social surveys both in Uganda and in Tanzania. The Front-End Engineering Design (FEED) study, together with the Environmental and Social Impact Assessment, and the Geophysical and Geotechnical Studies are currently being undertaken in both countries
Front End Engineering Design (FEED), is the basic engineering study conducted to detail and finalizes the technical design of the project. It is an engineering design practice that ensures thorough planning of a project prior to submission of fixed bids for the execution of the project. The FEED will develop the EACOP project Basic Engineering that will form the basis for Detailed Engineering, the Final Investment Decision, targeted end December 2017, and lead to the project execution and construction phase for the pipeline. The FEED activities will include pipeline corridor reduction from 2km to 30m width using technical, environmental and social data currently being collected through the ongoing surveys. The FEED deliverables include project construction specifications, basis of design, alignment sheets, plot plan layouts, project execution plan, schedule, cost estimates and call for tenders’ preparation. The FEED activities are estimated to last for a period of 8 months.
The pipeline will be constructed by an Engineering Procurement and Construction Management (EPcm) contactor who will be selected through a tender process and will be operated and supervised by a pipeline Company with shareholding from the Uganda National Oil Company, the Tanzania Petroleum Development Corporation and the three oil companies, CNOOC, TOTAL and TULLOW
The pipeline will cross 2 countries, Uganda and Tanzania. In Uganda, it will start from Hoima; traverse 8 districts and 24 sub-counties for a distance of 296km, into Tanzania where it will cross 8 regions and 24 districts all the way to Tanga Port for a distance of 1,149km
Following extensive studies by the governments of Uganda, Tanzania and Kenya. The Government of Uganda selected the Kabaale (Hoima) – Tanga Route on the basis of being the least cost, most robust and most financially viable to deliver first oil to Uganda, targeted, End 2020.
Pipeline construction will start after the Final Investment Decision targeted end 2017 and will last approximately 36 months.
The pipeline will be buried to a depth up to 2 Meters. It will be buried deeper in areas where it has to cross rivers or roads. The only elements of the pipeline infrastructure which will be visible to the eye will be the pumping stations, some tranfsformers for the heating system and the storage and offloading facilities. Once the pipeline is built, the land directly above the pipeline itself will be re-rehabilitated.
The pipeline will be marked by different signs to provide an indication of its presence, approximate location, product carried, and the name and contact information of the company that operates it. These signs will help the public determine the location of the pipeline and prevent any excavation or damaging accidents.
Safety is Value No. 1 of the project. The East African Crude Oil Pipeline is taking concrete steps to ensure that health, safety, security, and environmental concerns are addressed throughout the planning, construction, and operational phases of pipeline. The pipeline will be buried – and the route is selected deliberately to avoid risk of earthquakes, volcanoes, flooding or other potential natural disasters. The engineering and materials selected are such that the pipes are very safe and will not corrode or leak.
An oil spill contingency plan is part of the design of the pipeline. The plan ensures that, in the unlikely event of an emergency, we are prepared to quickly respond, through control room technologies and training to manage, minimize and stop the flow of a pipeline quickly upon detection of a release.
Transporting oil by rail or road is significantly more expensive and risky than by pipeline. Transportation of the crude oil by road would require 2,000 trucks every day on the roads which would generate road safety risks, as well as environment and social issues. Transporting oil by rail or road can be viable for small volumes of oil over shorter distances, especially if the rail and road infrastructure is already in place. Pipelines are safe, efficient and, because most are buried, largely unseen
The Pipeline Company will need to secure access to land along its proposed route for the construction and operation of the pipeline and its associated infrastructure. Priority in the design and location of infrastructure will be to avoid physical displacement. For permanent installations such as access roads, pumps, heating stations and block valves, land will be acquired from its owners, on behalf of the Governments. Most of the land, however, will be leased by the Pipeline Company for the duration of construction and for temporary facilities, such as camps and yards.
The Pipeline Company will manage the land acquisition process on behalf of the governments of Uganda and Tanzania – and the process will be done in accordance with local laws and international standards.
The Project, on behalf of each Government, is committed to providing fair and adequate compensation for losses as a result of physical and / or economic displacement, in compliance with national regulations and IFC performance standards. Through the development of resettlement action plans, a resettlement package based on entitlement will be offered after consultation with eligible households. Valuation reports from the Chief Government Valuer, and RAP documents will be submitted to each Government for review and approval. After which the Pipeline Company will contact each affected household to draft land and compensation agreements. All agreements will be signed by the eligible Project Affected Persons (PAPs), with the consent form of their spouse, a representative of community leaders, a representative from the developer, and representatives from relevant authorities to be identified during the planning phase. Compensation will then be delivered directly to the affected household or individual based on conditions set forth in the agreements. In compliance with national regulations, compensation will be delivered prior to the access and acquisition of the land
The EACOP has benefits for both Uganda and Tanzania which include job creation, local content, new infrastructure, logistics, technology transfer and enhancement of the central corridor between Uganda and Tanzania. The most important direct benefit that will arise from the crude oil pipeline will be the increase in Foreign Direct Investment (FDI) for both governments. Local content is a key value for the EACOP project participants and will be fully integrated in the contracting strategy as well as the training programs. A local content plan is being developed to guide the implementation process.
It is expected that the Pipeline will provide training for people involved in its implementation, from welders through to pipeline operations staff, who will largely comprise nationals, sourced locally from the vicinity of the project. In doing so, this increase in their capacity will benefit these groups in the long-term since they will be able to work for similar projects or other additional industries in the future.
About 10,000 people will be employed during the construction and operation phases of the project. The EACOP project is committed to reinforcing the use of local workers and contractors through training programs and support to local companies by strengthening their skills and capacities, creating direct and indirect employment and supporting local content and procurement. The pipeline will create short term (2-3 years) skills that can be used in other infrastructure project/exported. It is expected that casual workers who will be involved in the construction phase of the proposed project will be sourced locally, from the vicinity of the project, which will further promote the development of local capacity
- The EACOP project will ensure that health, safety, security, social, economic and environment are addressed throughout the planning, construction and operation phases of the pipeline. The pipeline route has been selected to avoid the most environmentally sensitive areas like national parks and the high population density areas. Facilities will be carefully designed, located and operated to reduce any potential physical and ecological impacts.We have developed a biodiversity charter which sets the principles of our work. According o this charter, we carry out all EACOP activities while;
- Avoiding unnecessary impact to the ecosystem, the biodiversity and the local communities
- Minimizing any unavoidable impact to the ecosystem, the biodiversity and the local communities
- Restoring – Rehabilitating the impacted areas and managing their restoration
- Offsetting any residual impact seeking a net positive gain
We work hard to prevent a pipeline incident, but in the unlikely event of a pipeline emergency, we are prepared to quickly respond. An oil spill contingency plan is part of the design of the pipeline with control room technologies to control, minimize and stop the flow of a pipeline quickly upon detection of a release. Regular drills with local emergency personnel, such as fire and police departments, also ensure that our response to an incident is well-coordinated and effective. The viscous and waxy oil in the pipeline has to be maintained at 50°C for the oil to flow, which means that if there is a leak, the oil, will get solid very rapidly, minimizing the impact on the underground. In case of contamination, actions will be carried out to restore the land to its condition before the incident.
The EACOP Project is committed to meaningful engagement with all of its stakeholders based on the principles of participation, respect for human rights, non-discrimination, empowerment, transparency and accountability. Stakeholder engagement will therefore be conducted in order to; establish lasting, positive relationships with stakeholders, provide project information to enable stakeholders contribute meaningfully all along the process, work co-operatively with stakeholders to understand their concerns and seek solutions, commit towards the addressing of stakeholder concerns in a fair and effective manner and proactively consult in an open based dialogue appropriate for the different stakeholders. Community Liaison Officers (CLOs) monitor the impact of the EACOP Project on the local communities and among civil societies, local leaders and tourism stakeholders. This includes supervising the facilitation of social baseline and impact studies, and social impact management plans including land access – acquisition and resettlement, the management of grievances, local employment, and stakeholder engagement.
Once the oil from Lake Albert is depleted, (about 3 decades from now), it is possible that other discoveries of oil may have been made in Uganda or in the surrounding countries like The Democratic Republic of Congo, Tanzania and South Sudan. The actual physical life of the pipeline is much longer than that required for Lake Albert crude oil export. Generally when pipelines have been built (and paid for), it is much cheaper for any other crude oil to be produced and exported through the pipeline – so even some much smaller oil fields may become economically viable. Once all the relevant parties at the time decide that the pipeline is not required, then the abandonment phase will begin. With a buried pipeline, it might cause less environmental impact to flush it clean and leave it buried in the ground. It will all be subject to environmental scrutiny and governments approvals at the time.
The oil transported by the pipelines is in its Crude (unrefined) form and as such is unsuitable for consumption. In addition the oil is waxy with a high Waxy Appearance Temperature (WAT) content making it unusable for cooking or other uses. A strategy is in place to build a refinery that meets the petroleum products needs of Uganda and its regional neighbors, with any remaining to be exported through the Tanga Port in Tanzania.
The tariff is dependent on the financial cost of the project among other key parameter. The final tariff will be known after the completion of the FEED and attribution of the construction contract to the Engineering Procurement and Construction Management (EPcm) contractor. It has been agreed that the tariff should not be higher than $12.2 Per Barrel.
The pipeline will be owned by the shareholders of the project, namely; The Government of the Republic Uganda (Uganda National Oil Company) and the Government of the United Republic of Tanzania (Tanzania Petroleum Development Corporation), and the three upstream oil companies CNOOC, TOTAL and TULLOW PLC, who collectively seek to ship and export the crude oil. An independent Pipeline Company will be established, and it will enter into a number of contracts and agreements: with the host governments over whose territory the pipeline will pass, with contractors to build the pipeline and all of the necessary facilities. The Pipeline Company will be the owner of the pipeline facilities; however it will not own the oil that is being shipped through its facilities. The Pipeline Company will operate the pipeline and will have responsibility for the long term safe and uninterrupted operations of the pipeline.
The estimated total cost investment of the project is $3.5 Billion. The 3.5 Billion USD investment capital associated with the construction and operation of the pipeline will be directly injected into the economy of Tanzania and Uganda, increasing their FDI by over 60 % during the construction phase.
Banks and financial institutions will provide a large part of the financing for the $ 3.5 bn EACOP project. 70% is the targeted level of debt towards the financing of the project. The remaining 30% will be financed by the project stakeholders including the Governments of Uganda, Tanzania and the Joint Venture partners; Total, Tullow Pty Ltd and CNOOC.