In 2006, commercial quantities of oil were confirmed to exist in the Lake Albert basin in Uganda. The Oil companies in Uganda; CNOOC LTD, TotalEnergies and TULLOW PLC completed the exploration phase. In November 2020 TotalEnergies finalized the acquisition of Tullow’s entire interests in Uganda Lake Albert development project including the East African Crude Oil Pipeline in 2020. TotalEnergies, now a majority shareholder and CNOOC are now headed into development phase, which will consequently lead to the production of Uganda’s oil resources.
Once produced, the crude oil will be partly refined in Uganda to supply the local market and partly exported to the international market. The export to the international market will be through an export crude oil pipeline; The East Africa Crude Oil Export Pipeline (EACOP). This pipeline will be constructed and operated through a Pipeline Company with shareholding from the Uganda National Oil Company, the Tanzania Petroleum Development Corporation and the two oil companies; TotalEnergies and CNOOC.
THE EACOP PROJECT
The EACOP is a 1,443km crude oil export pipeline that will transport Uganda’s crude oil from Kabaale – Hoima in Uganda to the Chongoleani peninsula near Tanga port in Tanzania.
The pipeline route was selected by the Government of Uganda as the least cost and most robust.
Due to the viscous and waxy nature of Uganda’s crude oil, the pipeline will need to be heated along the entire route, making the EACOP the longest electrically heated pipeline in the world.
The pipeline will be buried to minimize impact on the environment, with some facilities above the ground, designed to ensure minimal environmental and social impact.
The project will be compliant with the Ugandan and Tanzanian national legislations and international requirements.
The Marine Export Storage Terminal and the Load-Out Facility will be located north of Tanga port over the Chongoleani peninsula.
Unlocking East Africa’s Potential
The Economic Commission for Africa indicates that East Africa registered the fastest economic growth in 2016 compared with the other regions on the continent, with an impressive growth rate of 5.5% in 2016, projected to increase to 6.0% in 2017 and 6.3% in 2018 respectively.
The World Bank’s Global Economic Prospects Report, further anticipates that Tanzania will post 7.1% growth, Kenya and Rwanda 6%, Uganda 5.6% and Burundi 2.5% in 2017.
Capital Injection in the Economy
East Africa’s development as a preferential business hub and the region’s remarkable investment flows are largely attributed to the capital investment in the oil, gas and manufacturing industries with the respective governments undertaking several multibillion dollar projects, such as, The East African Crude Oil Pipeline Project (EACOP). The EACOP is a 1,443km pipeline that will transport crude oil from Uganda to the Indian Ocean Coast in Tanzania. The construction of the pipeline will lead to a substantial rise in Foreign Direct Investment (FDI) for both countries.
The 3.5 Billion USD investment capital associated with the construction and operation of the Pipeline will be directly injected into the economies of Uganda, and Tanzania increasing their FDI by over 60 % during the construction phase.
The project will be constructed and operated through a pipeline company with shareholding from the Uganda National Oil Company (UNOC), the Tanzanian Petroleum Development Corporation (TPDC), and the two oil companies, TOTALENERGIES and CNOOC.
Potential for oil exploration in the region
The East African Crude Oil Pipeline will unlock East Africa’s oil potential by attracting investors and companies to explore the potential in the region.
Enhancement of the central trade corridor
The project will contribute towards the enhancement of the central corridor between Uganda and Tanzania through the development of new infrastructure, logistics, technology transfer and the improvement of the livelihoods of East Africans.
The pipeline will create short term (2-3 years) employment for both highly skilled and, semi-skilled professionals, and casual laborers. It is expected that casual workers who will be involved in the construction phase of the project will be sourced locally from each district, thus promoting the development of local capacity to develop other pipeline projects in the region.
The pipeline will also provide business opportunities for the different sectors of the economy involved in the pipeline design, construction, and operation and decommissioning of the project, and create a trickle down economic effect spurring the development of local content.
Developing the Oil & Gas Value Chain
The development and maintenance of the pipeline infrastructure in the two countries will also contribute to the capacity building and know-how of national service providers.
Targeted national content programs will aim to enhance the transfer of knowledge, training and capacity building to enable these companies to be pre-qualified and potentially bid for complex and high caliber projects.
Increasing Infrastructure Development
Along the pipeline route, service roads will be upgraded or developed to facilitate the access to and maintenance of the pipeline during its construction, operations and decommissioning phases. These roads will increase accessibility of the areas traversed by the pipeline enhancing the movement of goods and people and overall economic exchanges.
TotalEnergies is a broad energy company that produces and markets energies on a global scale: oil and biofuels, natural gas and green gases, renewables and electricity. Our 105,000 employees are committed to energy that is ever more affordable, clean, reliable and accessible to as many people as possible. Active in more than 130 countries, TotalEnergies puts sustainable development in all its dimensions at the heart of its projects and operations to contribute to the well-being of people.
CNOOC Limited (the “Company”, together with its subsidiaries, or the “Group”), is the largest producer of offshore crude oil and natural gas in China and one of the largest independent oil and gas exploration and production companies in the world. The Group mainly engages in exploration, development, production and sell of oil and natural gas. The Group’s core operation areas are Bohai, Western South China Sea, Eastern South China Sea and East China Sea in offshore China. Overseas, the Group has oil and gas assets in Asia, Africa, North America, South America, Oceania and Europe. China National Offshore Oil Corporation is the Company’s largest shareholder. It currently holds approximately 64.44% of the Company’s shares. CNOOC limited is listed on three stock exchanges, including New York, Toronto and Hong Kong. Standard & Poor’s has issued a credit rating of AA- for CNOOC limited, while Moody’s has issued a credit rating of Aa3. Both ratings are consistent with the rating agencies’ respective credit ratings for the People’s Republic of China.
The Uganda National Oil Company (UNOC)
The Uganda National Oil Company (UNOC), also known as the National Oil Company of Uganda, is a limited liability petroleum company in Uganda, owned by the Ugandan government, established under the 2013 Petroleum Exploration, Development and Production Act of Uganda, which provides for the establishment of the national oil company.
The government of Uganda (GOU)’s goal as set out in the country’s energy policy (2002) and National Oil and Gas policy (2008) is to ensure the sustainable utilization of discovered petroleum resources to contribute to early achievement of poverty eradication and create lasting value to society.
One of the key objectives of the Uganda National Oil Company is therefore to ensure an adequate, reliable, and affordable supply of quality petroleum products in the country. The petroleum deposits discovered so far are estimated at 6.5 billion barrels, of which 1.4 billion barrels are considered recoverable.
Tanzania Petroleum Development Corporation (TPDC)
Tanzania Petroleum Development Corporation (TPDC) is the National Oil Company of Tanzania through which the Ministry of Energy and Minerals implements its petroleum exploration and development policies. TPDC has manpower strength of about 400 and is organized into seven directorates and three Units, namely: Directorate of Upstream, Directorate of Downstream, Directorate of Finance, Directorate of Legal Services, Directorate of Cooperate Strategy and Planning, Directorate of Corporate Management, Directorate of Internal Audit, Communication Unit, Procurement Unit and Risk Management Unit. TPDC was established through the Government Notice No.140 of 30th May 1969 under the Public Corporations Act No.17 of 1969. The Corporation began operations in 1973. TPDC is a wholly owned Government Parastatal, with all its shares held by the Treasurer Registrar.
The Construction Phase
Once the Final Investment Decision (FID) is undertaken, the pipeline detail design, procurement and construction will start and last for about 36 months.
The construction will comprise of:
1. Construction of the Pipeline
Once ready, the pipeline is carefully placed in the pre-dug trench or, in some cases it will require to be bored under waterways or roads by using horizontal drilling.
2. Construction of the Temporary Facilities
Other facilities will be built such as;
Coating plants & Pipes storage yards
Construction of additional work space (Fuel, Helipad, Waste)
Hydrotest dams, access roads, borrow pits
3. Construction of the Marine Terminal and the Jetty
The crude oil, transported by the pipeline will be stored in the Terminal located on Chongoleani in Tanga bay, before being shipped and sold to other countries. Vessels will be thus loaded with the crude oil at a sheltered deep water site.
Land will be required to construct the EACOP and related facilities. This land will be acquired on either a temporary or permanent basis.
Temporary Access to Land
Within an approximatively 30m wide right of way for construction.
For temporary above ground facilities (like construction camps).
Land required for temporary basis will be leased for approximately 1- 4 years and returned to owners in a fully reinstated condition.
Permanent Access to Land
Land required on a permanent basis for above ground installations (Pumping Stations, Pressure Reduction Stations and the Marine Storage Terminal) and for the permanent Right of Way will be acquired.
After construction, EACOP will need land easements along the pipeline corridor with some restrictions in safety zones.
The EACOP project is committed to:
Compliance with applicable national legislation and international requirements.
Ensuring that all landowners and users living along the pipeline corridor will be treated with respect and compensated fairly.
Vulnerable people identified and assisted as necessary.
Secure agreements with each affected household, deliver compensation and livelihood restoration programs and help households move out of the area (for those who choose in-kind compensation for resettlement, help them move into their new land).
Commitment to Stakeholder Engagement
The EACOP Project is committed to meaningful engagement with all of its stakeholders based on the principles of participation, respect for human rights, non-discrimination, empowerment, transparency and accountability. Stakeholder engagement will therefore be conducted in order to:
Establish lasting, positive relationships with stakeholders.
Provide project information to enable stakeholders to contribute meaningfully all along the process.
Work co-operatively with stakeholders to understand their concerns and seek solutions.
Commit towards the addressing of stakeholder concerns in a fair and effective manner.
Proactively consult in an open based dialogue appropriate for the different stakeholders.
Corporate Social Responsibility
The East African Crude Oil Pipeline project is willing to support communities along the route.
The project team is currently working on a CSR strategy, identifying the needs, and getting an understanding of the existing district development plans, related on-going activities and stakeholders. This phase is key to ensure the accuracy of our future CSR activities.
The projects we will support in the near future will be built on a multi-partner basis, with communities, local authorities and all relevant stakeholders invested in them.
We pay great attention to the ownership process of these projects. Therefore, we are also keen on having a clear exit strategy for our support, right from the start: no project shall be undertaken until an acceptable plan has been found to sustain the project once our involvement is concluded. We will contribute to the community’s projects as possible support and will maintain but not replace local or national authorities in their efforts to fulfill their sovereign duties and responsibilities.
SUPPORTING LOCAL ECONOMIC DEVELOPMENT
As a major energy operator, EACOP shareholders must contribute to the development of our host countries. Going above and beyond our contractual obligations, we ensure that our operations create value and opportunities by supporting employment, training and the local industrial fabric.
We consider local content as key for the success of our operations. We are committed to promote the economic development and local industrialization in both Tanzania and Uganda.
Our vision is to develop a holistic approach to optimize Local Content from the construction phase of the project through to operations.
This approach aims at capitalizing on the Construction phase to build the capacity of the local companies and Tanzanian/Ugandan citizens who will work on the upcoming operations needs and will drive the growth of the Tanzanian and Ugandan oil & gas industry and general economy farther down the road.
The EACOP Project Local Content delivery is focusing on three main pillars:
Employment & training of Tanzanian/Ugandan citizens
Procurement of local goods & services
Proposals for technology transfer & capacity building
This development will be supported by many initiatives:
Encourage and support the formation of joint ventures between international and local companies to facilitate transfers of competencies and most important of all, technologies;
Reinforcing the use of local Ugandan and Tanzanian workforce and contractors through training programs and support to local companies;
Incorporating national content programs in all project contracts to encourage and develop local procurement of goods and services;
Support supplier development by reducing the complexity of contracts as a way of making them accessible to the local contractors;
Support local supplier development with programs aimed at building capacity at national and community level;
Promote internships and attachment of Tanzanian/ Ugandan citizens in petroleum activities;
support to the Industry Enhancement Centre including Health, Safety, Environment and Quality standards;
support of existing institutions in Uganda by providing knowledge, technology, mentorships and scholarships;
Ensuring EACOP sustainability and post project succession to Tanzanian/Ugandan citizens applying training schemes.
Driven by this ambition, we are strengthening the local socio-economic base, furthering the development of industrial capacity and facilitating skills transfer in Tanzania and Uganda.
Commitment to the Protection of the Environment and People
For the EACOP project we will ensure that potential effects on the health, safety, and security of communities, workers and the environment, are addressed and managed throughout the planning, construction, and operational phases of the project. We are committed to comply with national laws and international best practices, including International Finance Corporation (IFC) Performance Standards (PS).
The proposed pipeline route was selected over a number of years after comprehensive feasibility studies directed at avoiding environmentally and socially sensitive areas such as protected areas and areas of high population density.
The Front-End Engineering Design (FEED) and Environmental and Social Impact Assessment (ESIA) ensure that temporary and permanent facilities are carefully located. The pipeline and facilities will be constructed and operated to reduce potential adverse environmental and social impacts and maximize benefits.
The EACOP Project continues to develop a complete understanding of the diverse environment and social elements along the proposed pipeline route. The Project has worked with teams of environmental and social experts to develop a robust and comprehensive Environmental and Social Impact Assessment (ESIA). These studies are used to inform the design, construction and operation of the pipeline.
The ESIA is an impact identification and management tool that highlights:
Identifies the potential impacts on the natural environment and the human environment including the respect of human rights,
Evaluates the potential environment and social (including human rights) risks and opportunities,
Design and document measures to avoid, mitigate and manage negative impacts identify and enhance the positive impacts, including identification of monitoring,
Management and monitoring requirements for the implementation of mitigation measures.
The ESIA has been completed for both Tanzania and Uganda and approval certificates were issued on 29th November 2019 and 3rd December 2020 respectively. The ESIA studies were carried out by JSB & COWI in Tanzania and Eco & Partner in Uganda in collaboration with an international consultant RSK from UK in both countries.
As part of the ESIA, the project conducted a human rights impact assessment (HRIA) to identify potential effects on human rights associated with project activities. As a result of this study, we will understand what mitigation is required to minimize potential impacts through all project phases.
The ESIA is being completed by both national and international consultants. The studies will result in the development of robust environmental and social management plans that will guide the design, construction and operations of the EACOP project.
As part of our commitment to Biodiversity Conservation and Sustainable Management of Living Resources we are developing a biodiversity charter which will establish the principles to which we will work. Accordingly, we carry out all EACOP project activities while:
AVOIDING unnecessary impact to ecosystems, biodiversity and local communities
MINIMIZING any unavoidable impact to ecosystems, biodiversity and local communities
RESTORING and rehabilitating impacted areas
COMPESATING/OFFSETTING significant residual impacts
Environmental & Social Impact Assessment
The ESIA is the process that defines and evaluates the potential social and environmental impacts of a given project and their mitigation measures. The ESIA studies for the EACOP project were conducted around the crude oil export pipeline route (from Kabaale – Hoima in Uganda to Chongoleani peninsula, north to Tanga port in Tanzania) and the storage terminal (in Chongoleani). The studies were conducted in accordance with international guidelines, as well as laws of both the Ugandan and Tanzanian Governments.
The ESIA Process in Tanzania/Uganda
The ESIA process is guided by the national regulations, act, and guidelines as well as IFC Performance Standards for best international practice and other international agreements, standards and guidelines. Specifically in Uganda by the National Environment Regulations and the Environmental Impact Assessment (EIA) Guidelines and in Tanzania by the Tanzania national regulations (Environmental Impact Assessment and Audit Regulations, 2005) with other relative regulations and laws.
Health & Safety
Health and Safety is an integral part of the EACOP Project strategy, and one of our key values. The health and safety of our employees and stakeholders is top priority.
The East African Crude Oil Pipeline (EACOP) has taken active steps to ensure that health, safety, security, and environmental concerns are addressed throughout the planning, construction, and operational phases of pipeline operations. The pipeline will be buried – and the route is selected deliberately to avoid risk of earthquakes, volcanoes, flooding or other natural incidents.
Oil spill contingency plan
The East African Crude Oil Pipeline Project will be responsible for the safety of the pipeline, operating under a comprehensive series of regulations from construction to operation and maintenance. The engineering and materials used are such that the pipelines are very safe and will not corrode or leak. Before the pipeline is tested all welds will have been inspected for defects by ultrasonic or radiographic techniques. During operations, the Pipeline Company will carry out an online inspection using an inspection tool. The first inspection will take place early in the life of the pipeline and at scheduled intervals afterwards.
In the unlikely event of an incident there are several valves along the length of the pipeline that can be immediately activated by the central control room stop the flow of a pipeline quickly upon a release. There will also be detailed emergency response plans, whereby resources are immediately deployed in order to reduce the impacts of any release. The Pipeline will be inspected regularly in order to identify and treat symptoms long before they become a problem.
Once the pipeline is buried and commissioned, regular stakeholder sensitization and close surveillance of the right of way will be carried out in order to prevent the third party damage to the pipeline by careless digging and other construction activity. If a pipeline is damaged accidentally or sabotaged, leaks can be quickly detected because of the sudden drop in pressure recorded. When a leak is confined to a specific section, the oil flow is stopped as soon as possible at the pumping stations and automated block valves in order to isolate the section and contain any spill. There will also be detailed emergency response plans, whereby resources are immediately deployed in order to control and reduce the impacts of any release.
The pipeline will be operated 24/24 hours a day and 7/7days a week and will be run under the highest technical and HSSSE standards