Uganda and Tanzania have moved to deepen their energy partnership beyond the East African Crude Oil Pipeline (EACOP), unveiling a wider package of petroleum, natural gas and electricity projects designed to reshape the region’s energy trade.
The agreement, witnessed by President Yoweri Kaguta Museveni and Tanzanian President Samia Suluhu Hassan in Dar es Salaam, brings together the Uganda National Oil Company (UNOC), Tanzania Petroleum Development Corporation (TPDC) and Vitol Bahrain E.C. to develop the Tanga Regional Energy Hub.
At the centre of the deal is the transformation of Tanga into a major regional petroleum hub for storage, refining, logistics, trading and distribution.
Tanga to become regional petroleum hub
The proposed Tanga Regional Energy Hub is expected to build on infrastructure being developed around EACOP and position Tanzania as a strategic gateway for petroleum products serving markets across East and Central Africa.
Tanzania’s Energy Minister, Deo Ndejembi, described the project as the next phase of the two countries’ energy cooperation.
“EACOP transports molecules. The Tanga Regional Energy Hub transforms those molecules into prosperity,” Ndejembi said.
The hub is expected to attract investments of more than US$20 billion, according to the Tanzanian minister, potentially making it one of the largest integrated energy infrastructure developments in Sub-Saharan Africa.
Uganda’s Hoima refinery to remain on course
The deal does not replace Uganda’s planned 60,000-barrel-per-day Hoima refinery.
Instead, Uganda and Tanzania say the two projects will complement each other by increasing regional refining capacity and creating more opportunities to trade petroleum products.
Ndejembi said Tanzania supports Uganda’s decision to establish domestic refining capacity, arguing that it will enable Uganda to retain more value from its crude oil resources.
Uganda’s Energy Minister, Dr. Monica Musenero, similarly said the country’s strategy is to move away from simply exporting raw commodities and instead develop industries around petroleum resources.
She said this will create opportunities for skilled employment in areas including engineering, operations, maintenance, laboratory analysis and management.
Bidirectional petroleum pipeline planned
Another major component of the cooperation is the proposed refined petroleum products pipeline linking Uganda and Tanzania.
Unlike a conventional one-way supply system, the planned pipeline is expected to allow petroleum products to move in either direction depending on market demand.
This could give the two countries greater flexibility in supplying their domestic markets while opening additional export opportunities to neighbouring countries.
Feasibility studies and front-end engineering design for the proposed pipeline and storage terminal are progressing, with completion expected later this year.
Natural gas pipeline also in the pipeline
The energy partnership also extends to natural gas.
Uganda and Tanzania are conducting feasibility studies for a proposed natural gas pipeline connecting the two countries.
According to Musenero, the studies are at an advanced stage and are expected to be completed by October 2026.
The project could add another layer to the countries’ energy cooperation by creating infrastructure for the movement of natural gas between the two markets.
Uganda and Tanzania also targeting electricity trade
The deal goes beyond petroleum, with the two countries advancing plans for a 400kV electricity interconnector.
Uganda has already completed negotiations with the World Bank and secured US$250 million in June to finance its section of the transmission project.
The interconnector is expected to increase electricity exchanges between Uganda and Tanzania while strengthening the Eastern Africa Power Pool.
It could also provide a platform for expanded electricity trade between East Africa and countries in Southern Africa.
From EACOP to a wider energy corridor
The latest agreement signals a shift from a single cross-border oil project towards a broader Uganda-Tanzania energy corridor.
EACOP created the foundation for cooperation between the two countries. The new projects seek to build an ecosystem around that infrastructure through petroleum storage, refining, transportation, trading, natural gas and electricity.
For Uganda, the partnership provides additional routes and markets for its petroleum products and supports its push to develop downstream industries.
For Tanzania, the Tanga hub strengthens its position as a regional energy and logistics centre.
The two governments now face the challenge of moving the projects from agreements and feasibility studies into construction and commercial operations.
If implemented as planned, the projects could deepen energy integration between Uganda and Tanzania while positioning the two countries as key players in East Africa’s emerging regional energy market.
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