Kenya and Uganda resolve to extend oil pipeline

Kenya and Uganda have resolved to extend the Kenya oil pipeline from Eldoret to Kampala. Kenya Energy Minister Mr. Francis Masakhalia and his Ugandan counterpart Ms Syda Bbumba said at the end of a consultative meeting in Kampala on October 13 that feasibility studies for the project would begin in December.
The pipeline, with a pumping capacity of 220,000 litres per hour, or nearly 1 bn litres per year, will save Uganda the cost of transporting fuel by road and rail. Uganda currently consumes 460 mm litres per year. "We have not yet decided whether the project will be financed by the two governments or by the private sector, but that will be resolved after studies by the consultants," said Ms Bbumba.

Studies conducted in 1995 estimated that extending the pipeline to Kampala would cost $ 80 mm. Establishing the current cost and modes of financing is part the new study. At the end of the talks, the two countries signed two memoranda of understanding: one for the extension of the oil pipeline from Eldoret to Kampala and the other for increased power supplies by Uganda.
The meeting also renewed the term of the Joint Co-ordination Committee that oversaw the pipeline extension project. Uganda will increase its power load to Kenya from 30 MW to 65 MW from July 2005 and to 80 MW in July 2006. Details of tariffs and the duration of the contract will be spelt out in an agreement to be signed in mid-November. Sources said Kenya had contracted for less power than had been anticipated because it had several power generation projects currently under construction.