Kenya and Uganda Initiate Talks on Eldoret-Kampala Oil Pipeline Extension

In a significant regional development, Kenya and Uganda have officially initiated discussions on extending the petroleum products pipeline from Eldoret to Kampala. This strategic infrastructure project, aimed at bolstering the region’s fuel import market, has garnered considerable attention due to its potential to reshape energy logistics and enhance economic collaboration between the two neighboring countries.

Background and Objectives

The proposed pipeline extension is a crucial development that seeks to address several key issues in the regional energy sector. The initiative involves constructing a multi-product oil pipeline from Eldoret, Kenya, to Malaba, which is near the Kenya-Uganda border. Uganda will then extend the pipeline from Malaba to Kampala. Future plans include expanding the pipeline network to Kigali, Rwanda, further enhancing the regional energy infrastructure.

This project follows Uganda’s recent shift to independent fuel imports, which began in early July 2024. Previously, Uganda had relied on Kenya for the supply of refined petroleum products. The transition to independent imports was driven by a new agreement between the Uganda National Oil Corporation (UNOC) and Vitol Bahrain, aimed at securing more competitive fuel prices. Despite this shift, Uganda will continue to utilize Kenya’s Port of Mombasa and the Kenya Pipeline Company’s (KPC) infrastructure for the transportation of these products to Western Kenya depots, including Eldoret and Kisumu.

Recent Developments

The discussions regarding the pipeline extension were initiated with a meeting between Uganda’s Minister of Energy and Mineral Development, Ruth Ssentamu, and Kenya’s Ministry of Energy officials. The Kenyan delegation was led by State Department for Petroleum Principal Secretary Mohammed Liban, and the meeting was followed by a tour of the Kenya Pipeline Company (KPC) headquarters.

During the meeting, KPC Managing Director Joe Sang highlighted the strategic significance of the pipeline extension for Kenya. He noted that “the extension of the pipeline to Uganda is a strategic move for Kenya as the country seeks to regain its competitive advantage in the petroleum export market, particularly in light of Uganda’s new importation strategy.” Sang expressed KPC’s readiness to collaborate with the Ugandan government to advance the Eldoret-Malaba pipeline project.

Project Scope and Implementation

The pipeline extension project is designed to enhance the regional energy infrastructure and improve fuel supply chains. The planned multi-product pipeline from Eldoret to Malaba will facilitate the transportation of various petroleum products. Uganda will then be responsible for constructing the pipeline segment from Malaba to Kampala. The future expansion to Kigali, Rwanda, reflects a broader vision of regional integration and energy security.

The concept of this pipeline was initially proposed in 1995 through a Memorandum of Understanding between Uganda and Kenya. The project was revisited in May 2024 following a feasibility study funded by the European Investment Bank, which confirmed the project’s viability. The study’s findings have provided a solid foundation for moving forward with the project.

Statements and Commitments

During her visit to Nairobi, Minister Ruth Ssentamu emphasized that the trip involved planning and preparation for the project’s kickoff, as well as understanding the operational and infrastructural aspects of the Kenya Pipeline Company. This preparatory work is crucial for ensuring the smooth implementation of the pipeline extension.

In May 2024, President William Ruto of Kenya hosted Ugandan President Yoweri Museveni and discussed the pipeline project. President Ruto emphasized the importance of joint efforts, stating, “We have obliged our respective Ministers to take joint urgent measures to mobilize resources for the implementation of this regional shared infrastructure and report on progress by the end of 2024.” This statement underscores the commitment of both countries to ensure timely and effective progress on the project.

Implementation and Oversight

To facilitate the successful implementation of the pipeline extension, Kenya and Uganda have agreed to appoint a joint committee responsible for overseeing quality control. This committee will play a critical role in ensuring that the construction and operation of the pipeline meet the highest standards of safety and efficiency.

Both countries have also committed to mobilizing resources for the project and providing progress reports by the end of 2024. The establishment of a joint committee and the commitment to regular progress reporting are important steps in ensuring transparency and accountability throughout the project’s lifecycle.

Economic and Strategic Implications

The extension of the Eldoret-Kampala pipeline is expected to have significant economic and strategic implications for both Kenya and Uganda. For Kenya, the project represents an opportunity to strengthen its position in the regional petroleum market and enhance its export capabilities. The pipeline extension aligns with Kenya’s broader goals of improving energy infrastructure and promoting regional integration.

For Uganda, the pipeline will facilitate more efficient transportation of petroleum products and support its new import strategy. The ability to access competitive fuel prices while leveraging existing infrastructure will contribute to more stable and affordable energy supply for the country.

The potential expansion to Kigali, Rwanda, further underscores the regional significance of the project. By enhancing connectivity and integrating energy markets, the pipeline extension has the potential to support broader economic development and regional cooperation.

Challenges and Considerations

While the pipeline extension project holds considerable promise, it also presents several challenges and considerations. The successful implementation of the project will require careful planning and coordination between the two countries. Managing the logistical and technical aspects of pipeline construction, ensuring regulatory compliance, and addressing any environmental or social impacts will be critical for the project’s success.

Additionally, the economic and political stability of the region will play a role in the project’s execution. Both Kenya and Uganda will need to navigate any potential challenges related to regional dynamics, financing, and stakeholder interests.

The initiation of discussions on extending the Eldoret-Kampala oil pipeline marks a significant step towards enhancing regional energy infrastructure and promoting economic collaboration between Kenya and Uganda. The project represents a strategic opportunity for both countries to strengthen their positions in the petroleum market and improve energy supply chains.

With a commitment to joint oversight, resource mobilization, and progress reporting, Kenya and Uganda are taking important steps to ensure the successful implementation of the pipeline extension. As the project moves forward, it is expected to have far-reaching economic and strategic benefits, contributing to regional integration and supporting sustainable development in East Africa.