Uganda, Tanzania to sign $ 3.5bn oil pipeline deal

Tanzania and Uganda have signed an agreement allowing the construction of a 1,445 km (898 mi) crude oil pipeline.

The bn 3.5bn (7 2.7m) project will connect Uganda’s oil fields to the Tanzanian port of Tanga.

The signing ceremony was attended by the Presidents of both the countries.

Oil reserves were discovered in Uganda in 2006, but production was partially delayed due to a lack of infrastructure, including an export pipeline.

A start date for construction to prepare for the construction of East Africa’s first major oil pipeline has not yet been announced.

But warnings are being issued that the project could come at a heavy cost to some Ugandan communities.

Conservationists have also warned that drilling in Uganda’s nature reserves poses a threat to ecosystems.

The French oil giant is leading total projects with China’s CNOOC and the governments of Uganda and Tanzania.

Sunday’s ceremony comes after a total of days of the majority shareholders of Uganda’s oil fields, he said, adding that they have reached an agreement on the pipeline with the Ugandan government.

About 80% of the pipeline will run through Tanzania and the project is expected to generate more than 18,000 jobs for Tanzanians, Reuters news agency quoted government spokesman Hassan Abbasi as saying.