The Government of Tanzania is undertaking feasibility studies of constructing an oil trading hub in Tanga to supply fuel to East and Central Africa. The idea was taken up due to the region’s potential of becoming a major oil trading hub in East Africa and its strategic geographical positioning with deep sea port, ample area for construction of big storage tanks and railway connection.
Construction of the hub would help Tanga reduce freight charges for oil transportation from the source market as large crude carriers could anchor and filter oil products into other tankers in ship to ship (STS) transfer or to transfer storage tanks.
“Tanga should be an oil trading hub. The most ideal place in East African region is Tanga. We have big opportunity for oil trading,” Minister for Industry, Trade and Investments, Mr Charles Mwijage said during inauguration of second kiln at Tanga Cement Company at Pongwe.
Mwijage observed that the area can create a conducive environment for ship to ship (STS) transfer due to its 25 metres draft deep. Also, Tanga has no congestion of tanks and has a railway network giving it an edge to store up to 10,000 tonnes of construction of tanks for white products.
Tanzania is building its own crude oil pipeline from Uganda to Tanga in 2020 at an estimated cost of $3.5 billion. The pipeline between Kabare in Hoima District and Tanga is about 1,400km, will be the most cost-effective route when Uganda begins exporting oil by 2020. It (Tanzania) decided to go this way rather than the Kenyan route after it was reported that the route (Uganda) was cheaper and more secure than Kenya.
Recently, Kenya’s cabinet approved the plan for development and commercialization of crude oil and early oil production to facilitate development of an international market for Kenya’s crude oil.
