Kenya, Uganda agree to build 1,500km oil export pipeline to Indian Ocean

August 10, 2015 | Kenya, Pipelines, Uganda

Kampala, Uganda | – Kenya and neighbouring Uganda agreed on the route of a planned oil pipeline, ending months of debate on the link that will export crude from Tullow Oil Plc.

The pipeline will pass through the Lokichar basin in northern Kenya, Manoah Esipisu, spokesman for Kenyan President Uhuru Kenyatta, said Monday by phone from the Ugandan capital, Kampala. The countries had also discussed building the link through southern Kenya and the capital, Nairobi.

Tullow has found oil in both countries, with Uganda estimating finds at 6.5 billion barrels and Kenya at 600 million barrels. The planned $4.5 billion pipeline to the Indian Ocean will allow the British oil  company to start exports from joint ventures with Africa Oil Corporation and Total SA.

“The fact they eventually agreed on a route is good news for the likes of Total, Tullow and Africa Oil because the Kenyan and Uganda project can eventually go forward,” Stephane Foucaud, an analyst at FirstEnergy Capital LLP in London, said by e-mail. The companies didn’t immediately comment.

The pipeline will run for about 1,500 kilometres (930 miles) from Uganda’s Hoima district through Lokichar and on to the Kenyan coastal town of Lamu. Proponents for the southern route cited security concerns in the north, where bandits and Islamist militants have carried out attacks.

The export project remains subject to financing and security guarantees from Kenya, Esipisu said on his Twitter account on Aug. 8.