President Museveni had appealed to Dr Magufuli to
consider constructing a gas pipeline from Tanzania to Uganda along the same
route of the crude oil pipeline from Hoima to Tanga, whose construction was
launched yesterday.
Mr Museveni said Uganda has discovered a huge chunk of
iron ore reserve, but could not mine the resource due to
lack of coal or gas
for smelting. Speaking at Chongoleani Village here during the ceremony to lay
the foundation stone for the mega 1,445km crude-oil pipeline, Dr Magufuli
assured his guest that Tanzania will use the same route to supply gas to
Uganda.
“Uganda needs natural gas to revive her industries and
thus we will use the same route to have another pipeline to sell the energy to
Uganda,” President Magufuli said during the colourful ceremony.
On the other hand, President Museveni hailed the
government of Tanzania for scrapping taxes on all imported materials to be used
in undertaking the 3.5 million US dollars (about 8trl/-) project, the largest
private-funded initiative in the region.
Dr Magufuli disclosed that Tanzania had offered the
initiative as a way of encouraging the Ugandan government to use the Tanga Port
in a deal which a barrel will be charged 12.5 US dollars (about 27,500/-).
“We had to sacrifice a few things to encourage Uganda to
transport its crude oil through Tanzania since it had other alternatives,” the
jovial Magufuli stated during the pomp-filled ceremony to lay the foundation
stone.
Tanzania currently operates 532-km and 232-km pipelines
which transport natural gas from Mnazi Bay in Mtwara and Songo Songo Islands in
Lindi to the country’s commercial capital of Dar es Salaam, where the energy is
used for power generation, running of industries and cooking in few piloted
areas.
So far, Tanzania boasts of roughly 53 trillion cubic feet
of discovered natural gas offshore and onshore the Indian Ocean in Lindi,
Mtwara and Coast Region, with just a small fraction being used for power
generation, running of industries and cooking.
Not only that, Tanzania and Zambia run a pipeline
transporting imported crude oil from the Dar es Salaam Port to Zambia which was
constructed during the reign of founding Father of Tanzania, the late Mwalimu
Julius Nyerere.
Dr Magufuli revealed further that the Ugandan government
has agreed to release its experts to study hydrocarbons materials in Lake
Tanganyika and Eyasi, stating that should Tanzania strike oil it will transport
the energy through the pipeline launched yesterday.
The tax exemption is meant to reduce construction costs
of the pipeline which is expected to transport 216,000 barrels of the precious
liquid from oil fields in Hoima to Tanga Port for export.
Through the arrangement, all materials for the mega
project will not be subjected to transit fee, value added tax and corporate
tax, with an additional of 20 years of tax holiday. President Museveni said the
discovery of hydrocarbons in Uganda would play a critical role in boosting
economies of countries in the East African region.
The Ugandan leader urged member countries of the East African
Community (EAC) to procure goods and services within the region to spur
industrialisation and creation of employment opportunities.
Source: Daily News TZ