Japan's Toyota Tsusho to design Uganda-Kenya crude pipeline

Wed Nov 26, 2014 5:28am EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

NAIROBI Nov 26 (Reuters) - Japan's Toyota Tsusho has won a contract to design an oil export pipeline from Uganda to Kenya's coast, a Kenyan official said on Wednesday, as the countries seek to start crude production.

Oil discoveries in Uganda and Kenya and gas deposits found off Tanzania and Mozambique have turned east Africa into a frontier for hydrocarbon exploration.

Landlocked Uganda is planning to start crude production in 2018, while in neighbouring Kenya, Tullow Oil and Africa Oil are expected to submit development plans in late 2015.

Kenya estimates its crude oil reserves to be about 1 billion barrels - which experts say is enough to make a pipeline viable even without Uganda, which estimates its reserves at 6.5 billion barrels.

In June, the two countries and Rwanda invited bids for a consultant to oversee a feasibility study and initial design for the construction of the 1,300 km (808 mile) pipeline estimated to cost about $4.5 billion.

"Toyota Tsusho have already been awarded the contract for the feasibility study and preliminary engineering design, their final report is expected by mid-April next year," Joseph Njoroge, the energy ministry's principal secretary said on Wednesday.

Kenya's government has said that the pipeline designer would also be required to supervise the construction of a fibre optic cable from Uganda's oil fields in Hoima through the Lokichar basin in northwest Kenya, where the country has found oil deposits, to Kenya's proposed Lamu port.

The consultant is also expected to design tank terminals in Hoima, Lokichar and Lamu, the ministry said. (Reporting by George Obulutsa; Editing by James Macharia and Pravin Char)