Australia-based WorleyParsons and London-based Penspen are said to be the lead contenders to win the contract for the construction of the Uganda-Tanzania pipeline that will start in Hoima and terminate at the sea port of Tanga in northern Tanzania.
The two firms are likely to be appointed the engineering, procurement and construction management services contractors for the joint pipeline.
These two are the lead contenders out of the six firms that the technical team from the two countries and the development partners are reviewing as a decision will be made in November this year.
Last week, Uganda’s Energy Permanent Secretary Robert Kasande said that agreements with Tullow Oil, Total and China National Offshore Oil Corporation, who are jointly developing Uganda’s oil, could be signed in the next three months.
Tullow said in its half-year update last week that the Ugandan deal is expected in coming months as the upstream and pipeline front end engineering design (FEED) and upstream environmental and social impact assessment have been completed, and now await the award of the engineering, procurement and construction (EPC) contracts.
The contract awards are under evaluation and overall project sanction is expected by the end of the year. The joint venture partners continue to work towards reaching a final investment decision for the development project around the end of 2018, with operational activity continuing as planned.
Discussions on the key pipeline project agreements continue between the joint venture partners and the Ugandan and Tanzanian governments. The pipeline FEED and EPC tender process for the pipeline have been completed with the award to be made in the second half of this year,” Tullow said, adding that the project financing for the pipeline and development of the financial model are ongoing.
Together with the oil firms, Uganda and Tanzania have been working on the projects financing blueprint for the past year. The two countries will raise 70 per cent of the project’s total cost from international lenders. The remaining 30 per cent will be raised through equity by Total, Tullow, CNOOC and the joint venture partners.
The Tanzania Petroleum Development Corporation and Uganda National Oil Company, through its subsidiary Uganda National Pipeline Company, are also expected to be part of the fundraising drive.
“We are delighted to be awarded this contract and we look forward to developing our relationship with Tullow Oil and increasing our business in Kenya,” Andrew Wood, the chief executive officer of WorleyParsons said.
The British firm Penspen is also not new to the region, having been awarded a contract in 2014 to undertake feasibility studies on the proposed Kampala-Kigali segment of the Eldoret-Kampala-Kigali pipeline. Penspen completed the study in 2015.
The pipeline was meant to interconnect with the one running from Nairobi to Eldoret and would ease the transportation of petroleum products to and from Kampala and Eldoret, including a spur line to Jinja.
