The East African Crude Oil Pipeline (EACOP), 64.5% complete, will connect Uganda’s oilfields to Tanzania’s Port of Tanga for global crude exports.
Despite $3.6 billion already spent and new financing secured, the project continues to face backlash from human rights groups and environmental activists.
Critics cite displacement of communities and threats to ecosystems, while developers argue EACOP will boost economic growth and infrastructure in the region.
Pipeline
The East African Crude Oil Pipeline (EACOP) has been in the works for over a decade, following repeated delays and widespread opposition from communities in the region, as well as environmentalists internationally, which led several investors to pull out over the years. However, significant progress has been made of late, and the two countries can now see the light at the end of the tunnel.
The development of EACOP is aimed at connecting Uganda with Tanzania to export crude from Uganda’s oilfields via the Port of Tanga, Tanzania, on the Indian Ocean. Tilenga is operated by TotalEnergies, and Uganda’s Kingfisher oilfield is operated by China National Offshore Oil Corporation (CNOOC). Since discovering crude 17 years ago, landlocked Uganda has aimed to export its oil supplies internationally, which led to the plan for EACOP in 2013. If completed, EACOP would be the longest electrically heated crude oil pipeline in the world, covering 1,443 km, with 296 km in Uganda and 1,147 km in Tanzania.
EACOP is owned by TotalEnergies (62 percent), CNOOC (8 percent), the Uganda National Oil Company (15 percent), and the Tanzanian Petroleum Development Corporation (15 percent). By June last year, EACOP had $2 billion in funding from the oil companies developing the project, but it needed a further $3 billion for its completion. Meanwhile, several investors have been forced to pull out at various stages of the project due to widespread opposition in both countries and environmental concerns at both the local and international levels.
Construction on EACOP commenced in 2017 but really took off in 2023, and by July this year, it was reported to be 64.5% complete. The pipeline’s construction was expected to bolster the economy of both Uganda and Tanzania by attracting higher levels of foreign direct investment, as well as support the creation of thousands of jobs and the development of related infrastructure, such as roads, ports and power.
Developers are reported to have spent $3.6 billion on the project to date, and its completion is now expected in around a year. However, the developers must still overcome certain geographical challenges to meet this deadline. The pipeline crosses uneven terrain, including 600 wetland, river, and road crossings, and has its top point at an elevation of 1,738 metres above sea level, in Tanzania.
To meet funding needs, after several investors pulled out, the developers were forced to invest more funds. In March, the project was awarded $1 billion in financing in the form of a syndicated loan from local and regional lenders – Stanbic Bank, KCB Bank, Standard Bank, Afriexim Bank, and the Islamic Cooperation for the Development of the Private Sector. The race is on to develop the pipeline as Uganda is set to commence crude production at its Kingfisher and Tilenga oilfields this year.
However, the project is not without opposition, even at this advanced stage of development. To construct the pipeline, the developers needed to establish a land acquisition programme covering some 6,400 hectares, which included the relocation of 775 primary residences and affected 19,262 stakeholders, landowners, and land users in total, according to TotalEnergies. However, one Human Rights Watch report suggested that EACOP could displace more than 100,000 people. This has led to backlash from communities across Uganda and Tanzania, as well as concern from international human rights groups.
There are also widespread environmental concerns about the development of EACOP, with the International Energy Agency stating in 2021 that to limit global warming to 1.5°C, no new oil and gas fields should be developed. Environmentalists worldwide have voiced concern about the potential impact of the pipeline’s development on the climate. During the project’s development, 43 banks and 30 insurers made public commitments not to support the project financially due to environmental and human rights fears.
Activists in the #StopEACOP movement have protested the development of the pipeline in recent years. This has led to the arrest of many protestors, as the Ugandan police view the demonstrations as illegal. Meanwhile, several government officials have dismissed the protests, suggesting that foreign powers have financed opposition efforts to undermine Uganda’s path to economic development.
In recent weeks, activists from End Fossil Occupy Uganda have expressed disappointment with the government’s clear dismissal of the ongoing protests. The group conducted a protest on 5th August against the anticipated impact of the project on the environment and communities in the region. “The project has already affected 13,000 people in Uganda and Tanzania who have lost their land with unfair compensation,” the group’s spokesperson, Felix Musinguzi, said. The project “poses risks to critical water sources, including Lake Victoria, which provides water to 40 million people,” Musinguzi added.
As EACOP reaches the final stages of development, following years of delays due to investor uncertainty, it looks likely to be completed. The pipeline will allow landlocked Uganda to export crude from its new oilfields to the rest of the world via Tanzania’s port. However, there is still widespread opposition to the project from human rights groups and environmentalists both locally and internationally.
Credit: Oilprice.com
