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Crude oil Two years after dumping Kenya for Tanzania Uganda has had a change of heart and now wants to ship its first batch of crude oil exports through Mombasa port

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Uganda’s oil, much like the Turkana crude, is waxy, meaning it will be transported in heated containers to keep it less sticky.

play President Yoweri Museveni (L) with President Uhuru Kenyatta (R) toast a drink at a past event. (edge)

Two years after abandoning Kenya in the planned construction of a joint crude oil pipeline through Kenya’s Northern Corridor, opting instead to team up with Tanzania, Uganda has had a change of heart and dumped Tanzania and decided to stick with East Africa’s biggest economy.

Uganda has announced it would ship out its early crude oil exports through Mombasa port as it moves to becoming the first East African nation to export crude oil.

play Mombasa port. (TradeMark East Africa)

 

Uganda’s decision to use the Mombasa port for its early exports is due to the shorter distance and availability of port infrastructure for loading oil on to ships.

“Transport to Mombasa will be all road. The shippers are looking at Mombasa,” officials said.

“The crude has been in ISO (International Organisation for Standardisation) tanks for years and has been kept in 3,000 containers.”

As per the initial plan, the pipeline was to run from Uganda through Kenya’s Lokichar basin in Turkana to the proposed Lamu port.

In January, French oil firm Total SA committed to building the Lokichar to Lamu oil pipeline in exchange for shares in three Kenyan oil blocks.

play Pipeline (insidenewsafrica)

Also read: KENYA'S CRUDE OIL PIPELINE TAKES SHAPE AFTER TULLOW AND KENYA SIGNS USD2B PIPELINE DEAL

Kenya opted to forge ahead with the plans to build the Sh210 billion ($2.1bn) pipeline that covers the 865 km between Lokichar and Lamu.

It is not yet clear what may have changed Uganda’s mind but the turn-around is a big diplomatic win for Kenya which has in recent years been feeling a bit lonely.

The two leaders have in recent years rekindled their relations which had been battered by Migingo Island row, which the two countries claim ownership.

Uganda’s President, Yoweri Museveni, last year paid newly sworn in President Uhuru Kenyatta a courtesy call where the two held bilateral talks.

play President Yoweri Museveni meets President Uhuru Kenyatta at State House Nairobi December 19 2017. (Citizen Digital)

 

Last month, the two heads of state jointly opened the Busia one border post, expected to promote integration and trade by easing transportation of goods and peoples from Uganda and Kenya.

The Uganda National Oil Company (Unoc) in January invited bids from freight operators to haul its initial consignments of crude oil that was produced during well testing of the Albertine Graben oilfields.

“The Unoc intends to dispose of 45,211 barrels of test crude in the Albertine Graben,” the State-owned company said in a notice that requires investors to issue a bid security of $10,000 (Sh1 million).

Also read: KENYA'S 'LIGHT AND SWEET' CRUDE OIL HAS CHINA AND INDIA LICKING FROM ITS PALM

play Uganda oil pipeline route options (observer.ug)

The bidding window closed on Friday and will be followed by evaluation and award of contract at the end of next month — paving the way for the trucks to hit the road.

Uganda’s oil, much like the Turkana crude, is waxy, meaning it will be transported in heated containers to keep it less sticky.

The ISO certified tanks are built in such a way that they can fit on trucks, rail or ship for transport.

Based on the prevailing global crude prices of about $60 per barrel, Kampala looks set to earn about Sh271 million ($2.71m) from the small-scale exports meant to test acceptance of its crude in the global market.

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