Tanzania’s Magufuli wants oil pipeline completed in less than three years

Tanzanian President John Pombe Magufuli has urged French oil major Total E&P, the lead joint venture partner on the proposed crude oil export pipeline from Hoima to Tanga, and other investors involved to mobilise at least “10 contractors” to speed up construction before 2020.

The Tanzanian leader, known for cracking the whip on incompetent and corrupt public servants in his country said there is no need to wait for 2020 if this can be done.

“We need the investment now. As Tanzania we are ready for the project,” he added.

President Magufuli made the remarks on Thursday evening at the ceremony to lay the cross-border stone to mark the passage of the proposed $3.5b pipeline in Kyotera district. The first keystone was laid by the two leaders at Tanga port in Tanzania in August.

Insiders say the laying of the stones symbolises political will by the two leaders towards the project, which will be funded by loans from European and Chinese lenders.

Addressing officials at the ceremony attended by dozen officials from both governments, Mr Magufuli said his country will be politically stable “during my leadership and in future.”

His Ugandan counterpart President Museveni rallied local communities to “prepare” for the thousands of jobs to be created.

The pipeline is expected to run from Kabaale parish in mid-western Uganda in Hoima to Tanga port at the Indian Ocean.

The two countries, with the substantial involvement of Total, are tentatively looking at the first quarter of 2018 for closing a Final Investment Decision and subsequently an Engineering, Procurement and Construction agreement in mid-2018.

The FID decision, according to industry insiders is informed by the near-to-completion of the Front-End Engineering Design for the pipeline.

Total officials say the FEED study report is at “completion stage for submission”.

The plan is to raise 70% of the $3.5b capital development financing from international lenders, while the remaining 30% capital will be mobilised through equity by Total and its joint venture partners—Tullow and Cnooc, and the national oil companies of Uganda and Tanzania.