Kenya and Uganda to float joint tender for pipeline

Pipeline vicki watkins FlickrKenya and Uganda will jointly float a tender for the construction of a crude oil export pipeline before the end of 2015

The pipeline, to be built at a cost of US$4bn, will cover about 1,500 km from Hoima in western Uganda to the Lamu port on Kenya’s coast and will allow the two countries to export crude oil.

The pipeline from Hoima to Lamu is expected be completed either in 2018 or 2019, as the project has been integrated into the Lamu Port-South Sudan-Ethiopia Transport Corridor (Lapsset) infrastructure project.

The Lapsset Corridor Development Authority (LCDA) said that a tender inviting companies to submit bids for building the pipeline will be floated before the end of this year, so that construction can begin in 2016.

Silvester Kasuku, director-general of LCDA, said that construction of the pipeline will be funded through debt and equity, and that the debt-equity ratio will be decided after a transaction advisor has been selected.

“The selection of a transaction advisor is almost complete. The first oil is expected to flow in 2019. The pipeline is a critical success factor of Lapsset, which will open 70 per cent of Kenya’s landmass to economic development,” Kasuku said.

Tullow Oil discovered six million barrels of oil in the Lokichar basin in northwestern Kenya while Tullow Oil, France’s Total and China National Offshore Oil Corporation have found 6.5bn barrels of oil in western Uganda.

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