Chinese export credit agency Sinosure is slated to complete talks with Uganda and oil companies TotalEnergies and CNOOC this month to provide $3bn for the country's crude export pipeline EACOP, after western financiers pulled out due to environmental concerns, Petroleum Authority of Uganda director Ernest Rubondo said today.
"We are finalising talks on funding later this month, we are already in advanced stages and we hope that the actual pipeline construction will commence before the end of the year," Rebondo told Argus. "We have finalised the compensation of persons affected by the pipeline and we are ready to build the line without any interference."
EACOP has faced strong opposition since its inception, with environmental campaign groups putting pressure on financial institutions not to fund the project because of the associated ecological and humanitarian risks. Around 25 major banks have publicly distanced themselves from the pipeline. The EACOP shareholders are looking for banks to finance 60pc of the total cost, which has risen to an estimated $4bn-5bn from an initial $3.5bn because of delays.
Rebondo said Sinosure's involvement means "funding is no longer a problem here," and said works are ongoing for material storage, pump stations and workers' accommodation at the Kabaale Industrial Park, where the pipeline will begin.
EACOP will link oil fields in the Lake Albert region, northwest Uganda, with international markets via the Indian Ocean port of Tanga in Tanzania. Rebondo said pipes are being manufactured in China and will start to arrive in Uganda by the end November after being coated at Tanga where a coating plant has been built. The 216,000 b/d capacity pipeline will be heated along its 1,445km length because of the viscosity of the crude to be produced in Uganda.
The country expects first oil from TotalEnergies' Tilenga and CNOOC's Kingfisher projects by 2025 with a plateau production of 230,000 b/d.
