A feasibility study for the Kenyan option by Nagoya, Japan-based Toyota Tsusho Corp. estimated the cost of the project at as much as $5 billion. Routing the pipeline through Tanzania would cost about $4 billion, according to state-owned Tanzania Petroleum Development Corp.

http://www.chicagotribun...970d-20160423-story.html

Are the Ugandans exporting refined or crude? I will not be surprised if like Nigeria they export crude and then have to import the refined stuff through Mombasa

http://allafrica.com/stories/201604250062.html

COPY AND PASTE FROM MONITOR OF UGANDA .... At least there is no mention of Raila anywhere in the article..................


opinion
By Frederic Musisi and Mark Keith Muhumuza


Kampala — Kenya's President Uhuru Kenyatta is usually a very jolly man. But at the 13th Northern Corridor Infrastructure Summit held at the weekend in Munyonyo, Kampala, he appeared to be the opposite of his usual self.

Days to the summit, it had been concluded, and perhaps he had even been briefed early enough, that Uganda had chosen the southern route through Tanzania for the proposed multi-billion dollar crude oil export pipeline.

The political manoevering

With an election not so far away, according to insider accounts, Mr Kenyatta had hoped for his country to snap up the deal via the Northern route to the Lamu Port on the Indian Ocean. The project commencing in a pre-election year meant investments, jobs and other associated benefits--which undoubtedly would go to his government's credit.

Ugandan technocrats, however, knew clearly and very early enough, after several feasibility studies, that nothing worked in Kenya's favour. President Museveni, a close ally of Mr Kenyatta, as well had been briefed several times on the odds between the Northern and Southern routes. But how to eliminate Kenya cautiously, a long-standing bilateral partner, from the equation is why the final position had to be subjected to re-inspections of routes, reassessing feasibility studies, and the back and forth meetings.

In the final technical report, a copy seen by this newspaper, Ugandan technocrats from the Petroleum Directorate in the Ministry of Energy maintained that the southern route to Tanga port on the Indian Ocean coastline was the "least cost option." According to the report, the Port of Lamu lost out on all grounds of comparisons, which left it at a loss of the lucrative pipeline deal.

The Japanese engineering consultancy firm, Toyota Tsusho Corporation (TTC) had recommended Lamu in a feasibility report submitted to the two governments in 2014. TTC cited the need to tap into the already existing economies of scale between Uganda and Kenya, and further to tap into the benefits of $25b LAPSETT infrastructure corridor--the ambitious infrastructure corridor conceived by Kenya, Ethiopia and South Sudan.

French Oil giant, Total SA, parent company of Uganda's Total E&P--one of the three International Oil Companies (IOC) licensed to operate in Uganda from day one opposed this route not only for security concerns--Lamu port borders the restive Somalia where the Islamist al-Shabaab militias operate--but also the rough terrain with slopes above 25 degrees.

Total contracted the US-Houston (Texas)-based Gulf Interstate Engineering to undertake a feasibility study on the alternative, Tanga route, and which was found more viable and less challenging to get oil from Uganda to the international market.

Insiders also recounted that when in August last year, Presidents Museveni and Kenyatta, signed the first MoU to actualise a pipeline from Hoima to Lamu the Kenyans complicated the matter by wasting the already lost time in arguments over preconditions Uganda had set--such as guaranteeing security, upfront financing, and tariffs not higher than offered by the alternative. Whilst this was a heads of state decision, the technocrats had already put their feet down for Tanga.

In October the same year when Uganda signed another MoU with Tanzania, the Kenyans were awakened, quickly returned to the drawing board and expressed interest in revitalizing discussions to court Uganda for the deal.

After months of deliberations: the Ugandan team met with both the Kenyan and Tanzanian teams, and later the Ugandan officials met with top authorities of Total, who in fact promised to source financing for the project. At this stage it became clear Kenya had lost out on the deal.

Early in March this year, President Museveni met Tanzanian President John Magufuli on the sidelines of the 17th Ordinary East African Community (EAC) summit, and the two sealed the deal for the project.

Two weeks later, President Magufuli met the Total SA vice president for East Africa Javier Rielo, and the two agreed the company will start construction of the 1,410km (876-mile) pipeline "as soon as possible."

A week later, President Kenyetta called upon President Museveni to salvage the deal, and much as the two tasked technical teams from both countries and Tanzania added, to go back to the drawing board and even to consider the route to Mombasa, it was late.

Technical considerations

According to reports and insider accounts, before even the security aspect in Northern Kenya was made a factor, there was concern that construction of the port of Lamu--part of the LAPSETT corridor was almost two years behind schedule and thus was not the best option for the route.

This delay would mean Uganda would only get to export crude oil in the second quarter of 2022, with only 80 percent of the work complete.

First oil considerations

The Tanga port on the other hand is already operational, with 98 percent availability, and means if Uganda opted for it, would start exporting crude by earliest 2020. "The Kabaale [Hoima]-Tanga route is the only option to secure first oil export," the final report reads in part. Kabaale in Buseruka sub country, in Hoima is the poised to be the center of activity.

It is here that government earmarked 29sqkm of land [about 13 villages] for the construction of a Greenfield oil refinery. This will be the collection point for crude oil from all oil fields both from Northern Uganda (so far from Nwoya district where Total operates) and western districts of Buliisa (Tullow/Cnooc) and Hoima (Cnooc).

Terrain

The route to Lamu (1,038km)via North East Uganda to Kenya'a Lokichar, where the country discovered oil, to the port posed serious terrain challenges with hilly and steep slopes above 25 degrees. The Tanga route (1,239km) on the other hand was deemed flat with slopes, if any, below 15 degrees.

On the Ugandan side, the terrain around Mt Moroto were noted to be having considerable challenges in the construction of the pipeline. The terrain around the area would increase the cost by at least 5 times, compared to a flat terrain..

Infrastructure constraints

Even if the Lamu route were to be considered, the existing infrastructure in Kenya caused more headache. There are no existing roads and railway network along the route. Only a network of 183km of tarmac roads and 250km roads of usable murram roads are close by the project right of way. This road network was described as "not suitable for heavy trucks."

The Tanga route has existing roads with 1101km of tarmac roads and 582km of usable murram roads, and a railway along the project right of way.

The Lamu option was also considered expensive because of the cost of construction at the Port itself. Construction of the port was contracted to a Chinese company, China Communications Construction Company (CCCC) in 2013 but no significant work has been undertaken since--only a campsite is standing.

The port construction alone is Shs16.3 trillion ($5b).

The plan presented by the LAPSSET secretariat is to have the first berth standing by 2018, and a second and third berths erected by 2019 for general, bulk and containarised cargo, which further made it complicated. This update, according to one official was presented during a meeting in Tanzania on March 30.

Besides, the officials noted, the contractor had to undertake dredging of the port, estimated at a cost of Shs359b ($110m), which in their view was underestimated.

no wonder all the fuss, with some rejoicing on us Kenya not getting the deal while others are sad on the same.
Bad move from the government, they should have prioritized the lapset project ahead of the sgr, now if the UG and TZ deal go through they might and will most likely add a road, and opening up that part of TZ might take the business we get from UG and Rwanda and Burundi, which might make the sgr project not very profitable.
tutabaki na south sudan as the only business partner

Since I'm not an "expert" as some "experts" in wazua I'll limit my discussion to what I know.

This is a true story

There was this guy who wanted to marry a hot lass. Swenani type lass, yellow yellow.

So the young man took his friends and his clan to visit the parents home for dowry talks. Unfortunately the young lad did not have enough money and was given vikwazos after vikwazos by the young lady's family.

Ohhh the goat is not fat enough, ohhh, you need to buy us a car, ohhh, ohhh, ohhh

So the young lad went back home without the lady. His mother told him about another young lady, Impunity type who was just nice.

And they went and negotiated and agreed.

In the meantime, the young lady's family had deals to do. They needed to complete the contracts at Lamu port and get lapset going. How were they going to eat? Where are the tenders?

However, on going back to the young man, they found that he had already moved to Tanzania.

They had slept on the job on the most important issues.

Now the young lady's family is wasting time on social media declaring that anyone who agrees with Tanzania loves Raila and hates Kenya.

mmmhhhhh