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Tuesday, 19 August 2014

Global heavyweights in the race for $3bn East African oil pipeline project

International firms, some individually and others as consortia, are vying for the contract to build a multibillion-dollar petroleum pipeline connecting the oilfields in KenyaUganda and South Sudan to the proposed Lamu Port, on theKenyan coast.

Designs for the $3-billion Hoima–Lokichar–Lamu pipeline have been received from Tullow Oil and Africa Oil, which has submitted a design for the Lokichar–Lamu route; Toyota Tsusho (Hoima–Manda Bay–Lamu), Tullow, Total and CNOOC (Hoima–Lokichar–Lamu), Lapsset (Juba–Lokichar–Moyale–Lamu) and Total (Hoima–Eldoret–Lamu/Mombasa.

The submission of the designs follow on the request for proposals (RfP) issued by the governments of UgandaKenya and South Sudan in June 2014. The three governments intend to hire a consultant to oversee the feasibility study and preliminary engineering designs of the proposed pipeline.
The consultant will also supervise the imple-mentation of the project, which will include theconstruction of tank terminals in Hoima, Lokichar and Lamu, pumping stations and a 9-km-long pipeline from the Lamu tank terminal to offshore mooring buoys.
“The feasibility study and preliminary design will be jointly financed by the partner States, ensuring that the entire pipeline is designed to the same standards and codes,” the three governments say in a joint communique.
The proposed pipeline will be used to export crude oil from Kenya and Uganda through the Lamu port.
Earlier this month, East Africa Community heads of State (except Tanzania’s PresidentJakaya Kikwete) met in KigaliRwanda, where they resolved to accelerate the project.
Uganda is to submit comments on the RfP to the project steering committee for approval by July 10, 2014, and issuance of an addendum to the RfP [is expected] by July 11, 2014,” reads the communique, which was issued at the end of the summit.
After settling on the design issue, the partners plan to embark on a fundraising campaign. The pipeline project will be one of the largest joint infrastructure projects in the East Africa region.
The pipeline, which is part of the multibillion-dollar Lamu PortSouth Sudan–Ethiopia Transport, or Lapsset, Corridor Project, is a key priority for Kenya and Uganda, which have discovered crude oil reserves in the last few years.Uganda’s endowment is estimated at 3.5-million barrels, while Kenya is determining the level of its reserves.
By John Muchira