Tanzania and Uganda have signed a new agreement with global energy trader Vitol Bahrain to develop Tanga into a regional energy hub, strengthening cooperation that could transform fuel trade, investment and energy security across East Africa.
Tanzanian President Samia Suluhu Hassan and Ugandan President Yoweri Museveni witnessed the signing of the Memorandum of Understanding in Dar es Salaam during Museveni’s working visit to Tanzania.
President Samia said the project forms part of Tanzania’s broader strategy to add value to the region’s natural resources while deepening economic cooperation between the two countries. She said the project would create jobs, attract investment, and help citizens benefit more from the energy value chain.
Museveni said the agreement between the Uganda National Oil Company (UNOC), Tanzania Petroleum Development Corporation (TPDC) and Vitol Bahrain E.C. represents another step in the long-standing partnership between Uganda and Tanzania.
The agreement comes as East Africa undergoes major changes in its energy landscape.
Uganda is preparing to begin commercial crude oil production, with exports expected to travel through the 1,443-kilometre East African Crude Oil Pipeline (EACOP) to Tanzania’s Port of Tanga. This will make Tanga Uganda’s main gateway to international oil markets.
However, Tanzania and its partners want Tanga to become more than an export terminal. They are positioning the port as a broader regional energy centre.
The proposed hub could provide petroleum storage, blending, logistics, marine services and fuel trading. This would allow East African countries to capture more value from their oil resources and reduce their dependence on imported refined products and overseas trading centres.
The project also supports a wider regional energy strategy.
Kenya, Tanzania, Uganda and other East African countries are exploring plans to develop a regional oil refinery in Tanga, modelled on Nigeria’s Dangote Refinery. Aliko Dangote has also offered to lead the construction of the proposed refinery if the governments decide to proceed.
For Tanzania, the agreement strengthens its ambition to become East Africa’s energy and logistics gateway.
Tanzania already hosts the EACOP marine terminal and continues to expand the ports of Tanga and Dar es Salaam. The country is also pursuing major natural gas projects that could position it as a significant LNG exporter in the coming years.
Uganda also stands to gain from the development. As a landlocked country preparing to become an oil producer, it needs reliable export infrastructure to support the commercial success of its petroleum industry.
A regional energy hub in Tanga could strengthen fuel supply chains, reduce logistics costs and improve Uganda’s access to international energy markets.
Vitol’s involvement adds further weight to the project. As one of the world’s largest independent energy traders, Vitol already has strong commercial ties with Uganda through fuel supply agreements and plays a significant role in East Africa’s petroleum trade. This positions the company to support the development of regional energy infrastructure.
source: africa.businessinsider.com
African Energy Council