Ugandan President Yoweri Museveni and Tanzanian President Samia Suluhu Hassan have endorsed a Memorandum of Understanding for the proposed Tanga Regional Energy Hub on Tanzania’s Indian Ocean coast.
The agreement was signed by the Uganda National Oil Company, Tanzania Petroleum Development Corporation and Vitol Bahrain E.C.
The project will integrate petroleum refining, storage, logistics, petrochemicals and cross-border energy infrastructure, shifting the region’s focus beyond crude oil exports towards local processing and industrial value chains.
Energy Economist Dr Lungile Mashele said the initiative could attract substantial investment because it encompasses several large infrastructure projects. “You’re looking at transmission infrastructure, which must happen in that region. You’re looking at gas-to-power projects, pipelines that must flow,” Mashele said.
The East African Crude Oil Pipeline (EACOP), which will transport crude oil from Uganda to Tanzania, is already under construction.
Mashele said previous Uganda-Tanzania energy agreements had produced significant progress and demonstrated the potential benefits of deeper cooperation. “I am happy to say that in the case of the two countries in East Africa, they’ve made massive milestones since,” Mashele said.
According to Mashele, the Tanga hub could strengthen energy security and reduce exposure to disruptions affecting international supply routes.
“They will not be caught in that mess again and they want to ensure energy security,” Mashele said, referring to recent instability affecting the Strait of Hormuz.
Regional refining capacity could help East African countries retain more value from petroleum resources instead of exporting crude oil and importing refined products.
Mashele said the hub could also shorten fuel supply routes to Southern African markets, including SA, while creating jobs and supporting economic activity.
“You are looking at over something like 30 000 jobs that will be created from the pipeline, from the transmission infrastructure, from the power projects, from a lot of the work that is being done there,” Mashele said.
Mashele said the proposed Tanga hub and Uganda’s planned Hoima oil refinery should be viewed as complementary rather than competing projects.
“For them, it’s not really a competing interest, but it’s more of where can we unlock even more value for ourselves and where can we expand,” Mashele said.
Mashele warned that countries delaying energy investment because of licensing and policy constraints risk losing first-mover advantages. “By the time that we decide, if we decide to actually move, we will be the last in line,” Mashele said.
–ChannelAfrica–
