Kenya-Uganda-Rwanda oil pipeline aims to strengthen regional economy

By Bosire Boniface in Garissa

June 27, 2013

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Kenya, Uganda and Rwanda agreed on Tuesday (June 25th) to the construction of an oil pipeline connecting the three countries in an effort authorities say will strengthen regional co-operation and reduce energy costs.

  • Commercially viable oil deposits have been discovered in Kenya and Uganda. Above, a Tullow Oil rig stands at the Ngamia-1 well in Turkana County, Kenya. [Tullow Oil plc/AFP]

    Commercially viable oil deposits have been discovered in Kenya and Uganda. Above, a Tullow Oil rig stands at the Ngamia-1 well in Turkana County, Kenya. [Tullow Oil plc/AFP]

Kenyan President Uhuru Kenyatta, Rwandan President Paul Kagame and Ugandan President Yoweri Museveni met in Uganda where they agreed to extend an earlier Kenya-Uganda pipeline construction project to Rwanda.

Ugandan Foreign Affairs Minister Sam Kutesa read a joint communiqué from the presidents after the tripartite meeting, and said the three countries also agreed to work on a second pipeline.

"The first pipeline is the extension of the current one that brings oil products from Mombasa to Eldoret in Kenya to Kampala (Uganda) and Kigali (Rwanda)," Kutesa told reporters at the State House in Uganda on Wednesday. "The pipeline will be configured to also have a reverse mechanism so that when we have our own finished products it can pump those products backwards."

The second pipeline will be constructed to carry crude oil from Kampala to Lamu, Kutesa said.

The agreement did not give a timetable or cost for the construction, however, the Kenya-Uganda pipeline project was to cost 26 billion Kenyan shillings ($302 million).

Kenya and Uganda have been jointly seeking a contractor to construct the 320-kilometer pipeline, according to outgoing Ministry of Energy Permanent Secretary Patrick Nyoike. The two countries were seeking a new contractor after terminating the contract of Tamoil East Africa Limited in September 2012 over delays, he said.

The agreement comes at a crucial time when Uganda and Kenya have discovered commercially viable oil deposits, he said, and the project will help improve economic ties between the neighboring countries.

"The pipeline will eradicate the current tanker transportation and subsequently reduce the price of oil for consumers," he told Sabahi.

Besides improving transport time, the pipeline will also reduce frequent road accidents involving tankers crossing borders, said Kenya's Cabinet Secretary for East African Affairs Phyllis Kandie.

Currently, the two countries import oil products from the Gulf region through the Indian Ocean to the port of Mombasa where there are refineries.

Kandie said the pipeline would not only benefit Uganda, Kenya and Rwanda, but also Tanzania and Burundi. Reduced cost of oil transportation will also bring down production costs and improve the living standards of people in the region, she told Sabahi.

The pipeline project is one of several reached by Kenya, Uganda and Rwanda. The countries also agreed to fast track implementation of the East African Community (EAC) e-identity card and tourism visa, to enhance electricity generation, and to revamp the railway networks and build a standard gauge railway line in Kenya and Uganda that will be extended to Rwanda.

Kenya will oversee issues of electricity generation and distribution as well as oil pipeline development, Uganda will spearhead the issues of railway development and political federation, and Rwanda will be responsible for the issues of customs, the single tourist visa, and EAC e-identity card.

Despite the promises, Kenyan oil tanker drivers received the news of the pipeline construction with mixed feelings.

Johnstone Njoroge, a 45-year-old Kenyan tanker operator who transports oil from Mombasa port to Uganda and Rwanda, said the pipeline threatens the livelihoods of many families who rely on transportation.

"I have been in the transport industry for seven years," he said. "Ten months ago I managed to buy my own tanker that I transport oil with."

"The Kenya-Uganda-Rwanda pipeline is not good for me because if by any chance it is fast tracked and completed in under two years, I will not have recouped the money I bought the tanker with," he said.

Mohammed Hussein Abdille, 36, who also owns an oil tanker, said the pipeline would not affect his business.

The pipeline will only do away with long distance transportation, but the opportunities to transport oil products within the country remain, he told Sabahi.

"The governments should fast track integration of the East African Community because that would allow transporters to freely do business in any of the countries," he said.

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