March 14, 2016 / 2:16 PM / 3 years ago

Tanzania wants to speed up Uganda pipeline plan - presidency

* Kenya wants pipeline to run through its territory

* Oil companies at odds over which is best route

* Total concerned by security of Kenyan route

* Tullow says Kenyan pipeline cheapest for Uganda

By Fumbuka Ng’wanakilala

DAR ES SALAAM, March 14 (Reuters) - France’s Total has set aside $4 billion to build a pipeline from Ugandan oilfields to the Tanzanian coast and Tanzania wants the three-year construction timetable shortened, Tanzania’s presidency said in a statement on Monday.

The comments raise the stakes in a competition to secure the pipeline with neighbouring Kenya, which wants Ugandan oil to be exported across its territory and wants the pipeline to link up with Kenyan oilfields.

Neither Ugandan nor Kenyan oilfields have started commercial production. Determining the pipeline route is vital in helping oil firms reach a final investment decision.

Britain’s Tullow Oil, which is operating in Uganda and Kenya, favours the Kenyan route, saying it is cheaper as costs will be shared by more operators. Total, which operates only in Uganda, favours Tanzania.

Total has voiced concerns about security for the Kenyan route, with some sections likely to run close to the border with Somalia from where militants have launched attacks on Kenya.

President John Magufuli, who built a reputation for driving construction projects through swiftly when works minister before elected president last year, urged officials to shorten the three-year construction timetable, the statement said.

Total regional executive Javier Rielo told Magufuli “that his company expected to invest close to $4 billion for the project and that the funds had already been set aside”, said the statement, issued after talks between them.

“Tullow is clear that synergies from a joint pipeline mean that the lowest-cost option remains a route that links Uganda and Kenya’s oil resources,” Tullow said in a statement last week.

Kenyan officials say negotiations on the route are continuing. One industry source said pumping crude through Kenya would cost Uganda $12 a barrel, compared with $15 a barrel via Tanzania.

Total said its own studies showed Tanzania was cheaper.

“All the routes have been studied thoroughly and the conclusion is clear that the route from Hoima to Tanga is the least-cost route and the most reliable of all routes,” a Total source told Reuters. (Additional reporting by Elias Biryabarema in Kampala; Writing by Edmund Blair; Editing by George Obulutsa and Dale Hudson)

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