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Economy

Toyota wins design deal for Sh350bn Uganda-Kenya crude oil pipeline

Kenya, Uganda and Rwanda have up to the end of January to find financiers of the Sh350 billion ($4 billion) Hoima-Lokichar-Lamu crude oil pipeline after they settled on Toyota Tsusho Thursday as a consultant for the project.

Energy PS Joseph Njoroge said the crude oil pipeline — running 1,500km from Hoima near Uganda’s Lake Albert to Kenya’s Lamu port, and connecting to South Sudan at Lokichar — will be developed as a single project split into lots.

“Each country will carry out implementation in the area within their jurisdiction.

‘‘Uganda and Kenya will build the section of the lines within their boundaries,” Mr Njoroge said in a statement released after the three states signed a deal to hire Toyota Tsusho as a consultant in Kampala Thursday.

He added: “However, supervision of the construction will be by one agency (Toyota Tsusho) to maintain similar specifications.”

Experts have said the difficult terrain and waxy nature of East African crude, which calls for transportation by a heated pipeline, will stretch the cost initially estimated at Sh267 billion ($3 billion) by a quarter.

The pact with the Japanese engineering giant also binds the two implementing countries —Kenya and Uganda — to ensure that the project is completed in 2017 to 2018 when both states are set to start exporting crude oil.

The consultant will be required to finish the study within five months of the award (mid April).

Toyota Tsusho was among eight firms that were prequalified for the tender. 

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