East African nations to give single firm the contract for oil pipeline

Jun 06, 2014 12:00 AM

Kenya, Uganda and South Sudan will invite bids in June this year for a single consultant to oversee the building of an oil pipeline to transport crude to the Kenyan coast, a senior energy official said

Uganda and Kenya have discovered commercial quantities of oil and aim to start production in the next three years or so, the official added.

South Sudan currently relies on a pipeline through Sudan but ties between those two states have been strained since they split from each other in 2011.

Joseph Njoroge, Kenya’s Energy and Petroleum Ministry’s principal secretary, said, “What we want is to procure one supervisor for the entire pipeline so that the quality of the pipeline is the same.

“In two to three weeks we should see the advertisement for the consultant.”

East Africa has become hot property for international oil firms after Kenya and Uganda’s commercial oil finds and discoveries of gas off the coast of Tanzania and Mozambique.

Tullow Oil and Africa Oil, which control blocks in Kenya, have estimated discoveries in the South Lokichar Basin at 600 mm barrels, a level experts say is enough to make a pipeline viable even without Uganda, Njoroge noted.

Uganda’s reserves are put at about 3.5 bn barrels. Although the landlocked country plans to build a refinery, most of its production is expected to be exported.

The plan for a single consultant and transaction adviser was approved by the governments of Kenya, Uganda, Rwanda, South Sudan, Tanzania and Burundi in early May 2014. Those countries make up the East African Community (EAC), although South Sudan is still only an applicant to join the group.

Njoroge said a legislation regulating the Kenyan oil and gas sector would be sent to parliament in July or August this year, instead of by the end of June as the Ministry previously stated.

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