Uganda pauses Lake Albert FID to mourn Magufuli

A long-awaited final investment decision (FID) on Uganda's 230,000 b/d Lake Albert oil project has been delayed to next month following the death of Tanzania's president John Magufuli.

The project involves connecting Uganda's Kingfisher and Tilenga fields to the Tanzanian port of Tanga via a heated export pipeline. Total, the project's lead developer, and the governments of Uganda and Tanzania had been due to sign shareholder, tariff and transportation agreements for the pipeline on 22 March, paving the way for the FID this week. But the signing ceremony has been postponed to allow Tanzania to mourn Magufuli, who died in hospital from heart complications last week.

"As a mark of solidarity with the government and people of the United Republic of Tanzania at this sad moment ... Uganda shall join ... in observing a period of mourning for 14 days," Ugandan president Yoweri Museveni said.

Tanzania's vice-president Samia Suluhu Hassan was sworn in as the country's first female president on 19 March and is due to attend the signing ceremony for the pipeline agreements, but she will be unable to before Magufuli's burial on 26 March. Museveni did not disclose a new date for the agreements to be signed. Total and partner China's CNOOC had been targeting an FID for the Lake Albert project by the end of March, although intense lobbying by local and international campaigners to try to persuade banks to withhold funding support for the pipeline over social and environmental concerns had put the timeline under pressure.

The project has been beset by delays for several years. Protracted negotiations over upstream contract terms, a series of tax disputes, disagreements over crude export routes and uncertainty over the economics of a proposed domestic refinery have held up development.

The pipeline will carry 216,000 b/d of Ugandan crude to Tanga, making it the longest heated oil pipeline in the world. Because of its high sulphur content, the crude will require heating above 50°C to flow.

Ugandan energy ministry commissioner Frank Mugisha told Argus that Total will have a 72pc equity stake in the pipeline, CNOOC will have 8pc, Uganda's state-owned oil firm Unoc will have 15pc and Tanzania's state-owned TPDC the remaining 5pc. Total will raise around $2.5bn in international finance to support its share of pipeline construction costs, he said.

By Mercy Matsiko