NAIROBI: Kenya will next week hold talks with Uganda to determine future of the planned crude oil pipeline.
Energy Cabinet Secretary Charles Keter also said in case the talks fail, and Uganda pulls out to join Tanzania in constructing a similar pipeline, Kenya will go it alone.
He also maintained that Tullow Oil’s future in the country is secure since the pipeline will still be constructed.
“The pipeline route from Hoima to Lokichar to Lamu is the best option for Uganda given that Kenya will charge them cheaper compared to Tanzania per barrel of crude oil transported through the pipeline,” said Mr Keter.
The CS also added that given Kenya will be transporting 100,000 barrels a day through the pipeline, while Uganda will transport 200,000 barrels, the pipeline will be of more benefit to the latter.
Speaking at his office, Keter downplayed fears that giant French oil company Total was arm-twisting the Ugandan government to take the pipeline to Tanga in Tanzania, at the expense of Kenya, saying Total has invested only a third in Ugandan oil and therefore could not have the ultimate say.
Total has been a vocal opponent of the Kenyan pipeline, citing insecurity along the route since the pipeline will snake close to the Somalian border where Al Shaabab militants are hiding. Keter’s assertions come even as the executive director for Tanzania’s Petroleum Development Corporation, James Mataragio, announced that construction of the Tanzania-Uganda oil pipeline will begin in August and complete in two years.
Mr Mataragio added that construction of the $4 billion (Sh 405.8 billion) project will be carried out by UK’s Tullow Oil Plc, France’s Total E&P and China’s Cnooc.
Neither Ugandan nor Kenyan oilfields have started commercial production. So determining the pipeline route is vital in helping oil companies reach a final investment decision.
Britain’s Tullow Oil, which is operating in Uganda and Kenya, favours the Kenyan route, saying it is cheaper as costs will be shared by more operators.
Keter’s assertion that Kenya will go it alone in constructing the pipeline come after claims emerged that Kenya plans to transport crude oil to Mombasa through lorries and rail.