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Museveni, Magufuli sign landmark $3.5b oil pipeline project

CHATO – Presidents John Pombe Magufuli and Yoweri Museveni on Sunday, September 13, 2020, signed the Host Government Agreement (HGA) in Chato, Tanzania, to construct the crude oil pipeline project.

The 1,445KM Pipeline will transport crude oil from Uganda’s oil fields to the Port of Tanga on the Indian Ocean.

The two leaders signed the intention to start implementing the $3.5 billion project, warning that anyone who may attempt to delay the process will be dealt with accordingly.

“This is an important step towards the implementation of the project. We, the presidents, have signed and I will see who will delay it,” Mr. Magufuli said during his speech.

The agreement on the pipeline construction comes days after French oil company Total TOTF.PA said it had reached an agreement with Uganda protecting its rights and obligations in the pipeline’s construction and operation – known as the host government agreement.

Mr. Museveni said he was ready to give Tanzania 80 percent of the profits due to the fact that the largest part of the pipeline was in the country but, according to him, Dr. Magufuli settled on 60 percent.

“Uganda gave up about $800 million that would have been generated in the course of 25 years just to make this project kick-off,” he said as he stressed the need for the project to start.

The two sides also signed a deal on the crosscutting issues.

Dr. Magufuli and Mr. Museveni said in their joint communiqué that each country should conclude the host government agreement with the EACOP, start consultations for other agreements and expedite the implementation of the project.

Other remaining agreements which they said should immediately be worked on include that on port business, shareholding as well as financing.