African Development Bank (AfDB) has said that construction of oil pipelines in Kenya and Uganda that will be used in ferrying crude oil offer vast opportunities for private investors to gain a fortune in East Africa’s energy industry.
From a published online post, AfDB Regional manager for East Africa, Gabriel Negatu stated “Nobody has ever, ever lost money financing pipelines,” adding, if there is oil flowing, “it’s generally viable.”
Kenya is expected to begin commercial oil production and oil exportation in March and June 2017 respectively. This is after Tullow Oil official and the government approved the plan for development and commercialization of crude oil and early oil production. The government had earlier on announced that crude oil would be transported by road and rail from Eldoret to the port of Mombasa.
On the other hand, Uganda has already contracted three companies on a 25 year agreement to develop its oil fields in Lake Albert Basin. The companies are France’s Total SA, China National Offshore Oil Corp. and Tullow Oil. The pipeline is expected to begin in 2018 and will run from western region of Hoima to the Tanzanian port of Tanga.
Moreover, Kenya, Tullow and partners Africa Oil and Maersk Oil in June were settling on a Joint Development Agreement to implement the Kenya crude oil pipeline which will run from South Lokichar to the port of Lamu. Kenya and Uganda were to commence their technical, environmental, social studies and tenders required to proceed to FEED in the second half of 2016 with the objective of commencing FEED in 2017.
The AfDB will support the pipelines “with whatever means available,” Negatu said. “If there are two different pipelines, we will talk to both sides and find ways to make resources available.”
Kenya and Ethiopia signed a deal also to construct a joint pipeline from Lamu Port to Addis Ababa by the end of 2016 worth $2.1 billion. The project is part of a joint infrastructure regional project under LAPSSET corridor.