M a r k e t N e w s

Tanzania, Zambia to Negotiate Joint Oil & Gas Pipeline

Posted on : Tuesday, 29th November 2016

Tanzania and Zambia are to negotiate a new deal for transport of refined oil and natural gas.

The talks will centre around either modernising the existing 1,710km Tazama pipeline, which transports crude oil from the Dar es Salaam port to Zambia, or building a parallel pipeline for gas.
Tanzania’s Minister for Foreign Affairs, East African Regional and International Co-operation Augustine Mahiga said the project will be at the top of the agenda when President John Magufuli hosts his Zambian counterpart President Edgar Lungu on a state visit this week.
The Tazama (Tanzania-Zambia Mafuta) pipeline, which runs from Dar es Salaam to Ndola through southern highlands of Tanzania was built in 1968 to feed Zambia with crude oil imports after the Rhodesia colony (now Zimbabwe) under former prime minister Ian Smith imposed sanctions on Zambia, which was one of the frontline states for the liberation of Zimbabwe.
To manage Tazama the two countries formed a joint company, the Tazama Pipeline Ltd, with the government of Zambia owning 66.7 per cent and Tanzania 33.3 per cent.
The Tazama pipeline was initially designed to have 1.1 million tonnes of crude oil flowing through it per year, but is currently handling about 600,000 tonnes annually.
The new project, if endorsed, will enable the transportation of crude oil, refined oil and natural gas.
“It is economically viable to use Tazama to transport gas and refined oil either by using the existing infrastructure or constructing a parallel pipeline,” said Dr Mahiga.
Tanzania is estimated to have about 53.2 trillion cubic feet of natural gas deposits and is planning to build a natural gas plant but is undecided on whether the $30 billion project will be built in Mtwara, Lindi or Dar es Salaam.
Tanzania had already signed a pipeline deal with Uganda, to construct an oil pipeline from Hoima to Tanga Port for transporting Uganda’s crude oil for export.
Dr Mahiga said Tanzania is looking for more business opportunities with Zambia and the two heads of states are expected to sign several deals.
President Lungu’s visit should also see a final plan to revamp the Tanzania-Zambia Railway (Tazara) by contracting a Chinese firm.
Chinese ambassador to Tanzania Lu Youqing told The EastAfrican that a team of experts from Tanzania and Zambia will go to China to negotiate a better deal for revamping the railway before their recommendations are presented to the two heads of states for approval.
Mr Youqing said the management and financing of the project were among the issues being looked at.

Source : www.theeastafrican.co.ke/
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