Chinese partners to fund East African Crude Oil Pipeline

by Christopher Kiiza
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The French International News Agency, AFP reported on Wednesday that Uganda is in the final stages of negotiations with Chinese financiers to help fund the East African Crude Oil Pipeline (EACOP) project after some Western partners pulled out.

AFP quoted the Permanent Secretary for the Ministry of Energy and Mineral Development, Irene Batebe as saying, “we are having final discussions with our Chinese partners to provide about half of the finances required for the construction of the EACOP (East African Crude Oil Pipeline). We should be concluding the arrangements with the Chinese financiers this coming month (October),”

Batebe told AFP that Uganda was speaking to two Chinese financiers, the Export-Import Bank of China and Sinosure.

French energy giant, TotalEnergies is EACOP’s biggest shareholder with 62%, with Uganda National Oil Company (UNOC) on behalf of Government of Ugandan holding 15%, Tanzanian – 15% and China National Offshore Oil Corporation (CNOOC) – 8%.

EACOP is a 1,445-kilometer pipeline that will transport Uganda’s crude oil from Kabaale, Hoima District in Uganda to the Chongoleani Peninsula near Tanga port in Tanzania for export to the international market.

EACOP is the longest heated crude oil pipeline in the world and its construction will 3.5 billion dollars.

The construction of oil pipeline has come under fire from human rights groups and environmental campaigners who say it will harm the environment and the livelihoods of tens of thousands of local people.

Peter Muliisa, the Chief Legal and Corporate Affairs Officer at the Uganda National Oil Company (UNOC) says EACOP is not harmful to the environment.

“We have done an environmental, social impact assessment, and looked at all manner of potential impacts on the environment, and we avoided those that we believe were serious, and put in place mitigation measures for others because it has to interact with the environment like any other project,” he said.

Muliisa says that the construction of the pipeline and the route to take was chosen in a way to avoid “all sensitive environmental areas.”

 “All the Ramsar sites have been avoided. We have also, as much as possible, avoided forests. And where we have to cross a forest, we have gone by the fringes of the forest. We have identified the impact, we have avoided most of the serious ones, and we have mitigated the rest.”

Muliisa adds, “the pipeline is going to be buried, and when it is buried, the soil, and vegetation on top will be restored. You will not even know where the pipeline is. It has high modern technology, so, we can monitor it everywhere it is, and we can see whatever is happening in the pipeline, and if there is anything, we will be able to stop its functioning and we first sort whatever that is. It is expensive, but it is necessary that we put the environment [first] by deploying the best technology available.”

Among the claims put forward by the environmental campaigners to stop the construction of the East African Crude Oil Pipeline is the carbon emissions that are very harmful to the environment which cause adverse effects of climate change.

Muliisa explains that the carbon emission of the pipeline will be “significantly managed by making sure that the energy that heats it [the pipeline] that run over the ground facilities is generated from solar and the Ugandan grid. 80% of the energy we need to run the pipeline will be generated from [five] solar farms that we are constructing, and 20% will be imported from the Ugandan grid which is clean energy.”

He further explained that government and other project implementers are planting trees to ensure that the little emissions that may remain are offset by the trees.

“The project is carbon neutral, and it is environmentally structured to be safe.”

The pipeline crosses two rivers, and a number of swamps, and according to Muliisa, the construction will be done in a way that poses no threat to the water bodies as he explains below.

“For the rivers, we have done what they call horizontal directional drilling. We drill under the bed of the river, and we pass the pipe below the bed of the river from one end to the other, and there are block valves on each side of the river. So, the pipeline will have no contact with the river. It will be way under the sea bed. We have taken real detailed care to ensure that even where we cross the rivers, we have no contact with the water,” he explained.

Uganda in particular, and Africa as a whole are nowhere close to the global leading carbon emitters.

Uganda emits 0.014% of global carbon emissions. The entire African continent contributes 3.67%.

Uganda is planting 100 million trees to absorb carbon that will be produced by the oil projects.

Despite facing opposition, the Ugandan government remains committed to proceeding with its plans. TotalEnergies, the company spearheading the multi-billion-dollar project to extract oil in Uganda and transport it to Tanga port via EACOP, claims that those affected by the project have received equitable compensation, and steps have been implemented to safeguard the environment.

Uganda’s first oil is expected to flow in 2025.

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