President Uhuru Kenyatta’s government was on Friday dealt a major blow after Tanzania bypassed Kenya and signed a Ksh362 Billion ($3.55 billion) crude export pipeline deal with Uganda.
According to Irene Muloni, Uganda's Energy Minister, Tanzania had offered a fiscal incentives package that led Uganda to choose it over Kenya.
Muloni stated that in the deal, Tanzania emerged as the favoured host for the pipeline that is set to be the longest crude export pipeline when completed in 2020.
She added that the construction of the pipeline would facilitate and boost trade in the region and create over 10,000 jobs.
Speaking to Reuters, the manager for Total Company in Uganda Adewale Fayemi, said that the project would become "the longest electrically heated crude oil pipeline in the world".
Estimates put Uganda’s overall crude reserves at 6.5 billion barrels, while recoverable reserves are seen at between 1.4 billion and 1.7 billion barrels.
Kenya had bid to host the same pipeline with Uganda and had the deal gone through, it would have allowed Kenya to earn transit fees and also transport its own crude to the Lokichar basin in the North-West.
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Kenya’s Tullow Oil had earlier in the year announced it will begin laying the groundwork for the construction of the Kenya crude oil export pipeline from Turkana to Lamu from mid this year.
Tullow had reportedly stated that it expected to start construction of the 890-kilometre pipeline from next year and complete it by about 2020 when the country expects to start commercial production of oil.
