Kenya, Uganda defer pipeline decision after leaders meeting

Uganda suspended making a final decision on Monday on the proposed shipping of its crude oil through Kenya’s Lamu port setting up Kenya and Tanzania for intense rivalry in their quest to become the preferred regional trade and transport hub.

Kenya’s President Uhuru Kenyatta on Monday hosted Uganda’s Yoweri Museveni in Nairobi for what was pitched as a business meeting to discuss a joint crude pipeline to serve the two countries but failed to reach a final deal.

A joint statement by Kenya’s Energy and Petroleum minister, Charles Keter, and his Ugandan counterpart, Irene Muloni, said the two heads of state agreed to hold further talks in Kampala in a fortnight to allow their technical teams to complete comprehensive reviews of what it would take to build a crude oil pipeline through Tanzania and Kenya.

“The two leaders (Mr Kenyatta and Mr Museveni) agreed to meet after two weeks to allow their officials harmonise their presentations,” the ministers said, adding that the technical teams would focus on comparative costs of building a pipeline through Kenya and Tanzania as well as ease of construction on either route.

The Nairobi meeting came just weeks after Museveni and Tanzanian president John Magufuli reached a deal to build a 1,120 kilometre oil pipeline between Tanga and Uganda where an estimated 6.5 billion barrels of oil were discovered in the Albertine basin near the border with Democratic Republic of Congo.

Last week, Tanzania said oil marketer Total, which has a stake in Uganda’s crude oil discoveries, had set aside $4 billion to build a pipeline from the Ugandan oilfields to the Tanzanian coast and that Dar es Salaam wants the three-year construction schedule shortened.