The Ugandan government has signed a Memorandum of Understanding (MOU) with Tanzanian government, state-run TPDC and Total E&P Uganda, Petroleumafrica reports.

The MOU reflects on the development of an oil pipeline from Uganda to Tanzania providing an opportunity for other participant to join the process of evaluating and developing options for the route.

It also establishes a platform for the development of an export pipeline from Hoima in the Western part of Uganda to the Tanga Port of Tanzania. The main objective is to choose a route with the lowest unit of transportation cost.

“If we can be able to get least cost pipeline route to the East African Coast, our crude oil will be exported cheaply,’’ permanent secretary of Uganda’s Ministry of Energy and Mineral Development, Fred Kabagambe-Kaliisa (picture), said highlighting his desire to carry out due diligence which will require technical work. “As a country, we are evaluating the routes with the idea that we have the least cost route because we would like to ensure that our crude oil has value.”

However, the Managing Director of TPDC James Mataragio said: “This project is going to open new investment opportunities, and create jobs for citizens of both countries. We have that experience required to build and manage pipelines. I want to assure Ugandans that they have got all the support from TPDC and Government of United Republic of Tanzania.”

During the signing of the agreement, the government of Uganda and companies with licences in the country agreed that the Crude Oil discovered would be commercialized via crude to power, refining and exports. Due to this, efforts are being made to partner with industries and states where the pipeline is likely to pass.

Furthermore, Uganda is also presently undergoing a process to identify and evaluate the values of three pipeline routing options, two through Kenya to Mombasa and Lamu and one through Tanzania to Tanga. This is in respect of Uganda’s keenness to have a pipeline to the East African coast in order to transport its reserves, estimated at 6.5 billion bbls at the least feasible cost.

Uganda plans to commence production by 2018, though experts anticipate full-scale production by 2020 following the establishment of a refinery and an export pipeline.