Geza Ulole
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EACOP vs Lamu pipeline
EACOP vs Lamu pipeline
- Thread starter Geza Ulole
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Geza Ulole
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TotalEnergies declines to connect Congolese oil blocks to “famous” pipeline
Democratic Republic of Congo risks missing out on revenue from landlocked oil blocks without pipeline access.
worldoil.com
MY TAKE
Sad news indeed!
Geza Ulole
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Geza Ulole
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Geza Ulole
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The East AfricanNewsEast Africa
Eacop financing swings to China as its firms hog deals
SUNDAY MAY 07 2023
Oil pipeline
The Chinese appear to be taking over the financing of the East African Crude Oil Pipeline project, which has been hit by funding hitches as major lenders cave in to pressure from climate activists to abandon it. PHOTO | SHUTTERSTOCK
Summary
Eacop is the largest oil pipeline project in the region, spanning a 30-metre corridor and 1443km length from start to terminal.
TotalEnergies holds the majority stake of 62 percent.
Uganda National Oil Company (Unoc) and Tanzania Petroleum Development Corporation hold a 15 percent state each.
General Image
By JULIUS BARIGABA
More by this Author
The Chinese appear to be taking over the financing of the East African Crude Oil Pipeline (Eacop) project, which has been hit by funding hitches as major lenders cave in to pressure from climate activists to abandon it.
A week ago, Standard Chartered Bank withdrew a $5 billion offer after activists said the project could generate seven times more carbon emissions per year than the rest of the country. A Stanchart spokesman was quoted as saying the lender “isn’t involved in the financing” of the 1,443km crude pipeline from the oilfields in western Uganda to the Indian Ocean coast of Tanzania.
TotalEnergies – the lead investor in Uganda’s oil projects – is therefore racing against time to reach financial close for the pipeline, as well as to conclude land acquisition, without losing sight of the 2025 oil production and export timelines.
Read: Suit in France opposing Uganda oil project flops
While the rigs are up and upstream field development is progressing, Eacop is falling behind the schedule set by the government for the first oil to flow in 2025 due to land acquisition headaches and delayed financial close after many risk-averse banks targeted as financiers pulled out of the project.
Deal with China CPP
However, the French energy giant has signed a deal with China Petroleum Pipeline Engineering (CPP) for the construction and supply of line pipe, a development that tilts the trans-border project to Beijing, where the biggest chunk of the loans is expected to come from.
CPP is a subsidiary of state-owned China National Petroleum Corporation (CNPC), and joins another state entity China National Offshore Oil Corporation (CNOOC), which owns a 28.33 percent stake in the Uganda oil and eight percent of Eacop.
Dennis Kakembo, an energy law specialist told The EastAfrican that the recent turn of events was largely expected.
“You have to look at where financing is coming from… Whether it’s construction, insurance, financing, these deals always go where the money for the project is sourced,” he said.
Last year, Eacop managing director Martin Tiffen announced that Australian firm Worley was tipped for the engineering, procurement and construction management tender while Italy’s ISOF Construzioni SRL was evaluated to manage the coating plant for the pipes and fittings, now taken over by CPP.
“If the Europeans were financing the project, you would expect them to influence their companies to take up these deals,” Mr Kakembo noted, referring to a string of European and American banks that have opted out of the project’s financing, citing climate risk and human rights issues.
Before CPP, the pipeline deal worth $165 million was lined up for ChelPipe, the Russian manufacturer of welded and seamless steel pipes, but the company was ejected from the tender after the US and Europe slapped sanctions on Russia after it invaded Ukraine in February 2022.
Walked away
And now Stanchart has walked away, leaving China as the only realistic source of finance for the project, according to industry experts.
But NJ Ayuk, executive chairman of the African Energy Chamber, argues that Stanchart’s pull-out “is inconsequential” but adds that the Eacop shareholders, particularly TotalEnergies, will have to do the heavy lifting by taking a bigger chunk of the project’s equity financing to reduce the debt ratio.
“They have the balance sheet and Chinese financing,” he said of TotalEnergies.
Uganda government officials maintain that funding for the pipeline remains on track and multi-sourced from European, Middle East, African, and Asian financiers, particularly China. Energy Minister Ruth Nankabirwa has said the pipeline project “will get money” from Beijing.
Read: Uganda keeps oil dream alive
Last month, Eacop deputy managing director John Bosco Habumugisha said the governments had made good progress, raising 60 percent of the required financing for the project that is expected to unlock massive economic activity on the 1,443km-long corridor.
Last year, TotalEnergies CEO Patrick Pouyanné told shareholders that the amount of debt required for Eacop would be $2 billion and $3 billion.
Advisers
South Africa’s Standard Bank, Japan’s Sumitomo Mitsui Banking Corporation, and the Industrial and Commercial Bank of China, as well as the US insurance broker Marsh, are the advisers for financing and insurance packages for Eacop.
Confirmation of CPP deal means that Chinese firms are taking the lion’s share of the major contracts in Uganda’s oil projects after Sinopec was picked in 2021 as the joint main contractor alongside McDermott, for the Total-operated Tilenga project.
In February, another Chinese firm, China Petroleum Engineering and Construction Company (CPECC) finalised a deal with the French major to build ground facilities in the Tilenga oilfield.
Eacop is expected to transport 216,000 barrels-per-day of oil from Tilenga and Kingfisher oilfields in the Lake Albert basin to Tanga Port on Tanzania’s coast.
Between 2022 and 2025, the project is expected to undertake the land acquisition, contract award, detailed engineering, procurement, construction, and commissioning, including hydro-testing, and first oil from upstream facilities. But in May, there is no clear schedule when the contractors will get the green light to start construction.
Land acquisition stands at 85 percent in Uganda, and 98 percent in Tanzania of the compensation agreements signed, while compensations paid are at 76 percent and 97 percent respectively. Eacop officials in Kampala cannot say when this exercise will be concluded, citing a lack of requisite documents by project-affected persons.
Ahead in Tanzania
But in Tanzania, construction has started at the marine storage terminal in Tanga port and the coating plant site in Nzega District, while in Uganda, civil works will start at the main camp and pipe yard at Kakumiro, where land acquisition is complete.
Eacop is the largest oil pipeline project in the region, spanning a 30-metre corridor and 1443km length from start to terminal, developed to transport crude oil from Uganda to Tanzania from where it will be shipped to the international markets.
TotalEnergies holds the majority stake of 62 percent, while Uganda National Oil Company (Unoc) and Tanzania Petroleum Development Corporation hold a 15 percent state each, and CNOOC eight percent.
The project has been the target of a vicious campaign by local and international environmental and human rights activists, who say new fossil fuel projects are a ticking climate bomb that should be abandoned in favour of renewable energy.
Biggest heated pipeline
They also cite the fact that Eacop is the world’s biggest heated pipeline – the heating is meant to enable it to carry Uganda’s waxy oil – but the infrastructure crosses protected areas. Activists say the ecosystems in protected areas which the 50°C heated pipeline will cross will be harmed.
The European Union Parliament has backed the activists, and passed a resolution denouncing the project last year, arguing that the pipeline will produce 34 million tonnes of emissions per annum, hence posing a threat to local wildlife populations in conservation and protected and sensitive ecosystems.
But Peter Muliisa, chief legal and corporate affairs officer at Unoc, said that the Eacop is a buried pipeline and a very low emitter.
“In terms of contribution to total oil and gas emissions, upstream contributes 10 percent. Midstream, which is where the pipeline falls, is the least emitter; it contributes five percent. The rest of the emissions come from usage, and that’s downstream. So, if you look at the pipeline, it’s not emitting. Its mission is very limited,” he said.
Meanwhile, Uganda has from May 9-11 planned to host the 10th East African Petroleum Conference and Exhibition.
www.theeastafrican.co.ke
Eacop financing swings to China as its firms hog deals
SUNDAY MAY 07 2023
Oil pipeline
The Chinese appear to be taking over the financing of the East African Crude Oil Pipeline project, which has been hit by funding hitches as major lenders cave in to pressure from climate activists to abandon it. PHOTO | SHUTTERSTOCK
Summary
Eacop is the largest oil pipeline project in the region, spanning a 30-metre corridor and 1443km length from start to terminal.
TotalEnergies holds the majority stake of 62 percent.
Uganda National Oil Company (Unoc) and Tanzania Petroleum Development Corporation hold a 15 percent state each.
General Image
By JULIUS BARIGABA
More by this Author
The Chinese appear to be taking over the financing of the East African Crude Oil Pipeline (Eacop) project, which has been hit by funding hitches as major lenders cave in to pressure from climate activists to abandon it.
A week ago, Standard Chartered Bank withdrew a $5 billion offer after activists said the project could generate seven times more carbon emissions per year than the rest of the country. A Stanchart spokesman was quoted as saying the lender “isn’t involved in the financing” of the 1,443km crude pipeline from the oilfields in western Uganda to the Indian Ocean coast of Tanzania.
TotalEnergies – the lead investor in Uganda’s oil projects – is therefore racing against time to reach financial close for the pipeline, as well as to conclude land acquisition, without losing sight of the 2025 oil production and export timelines.
Read: Suit in France opposing Uganda oil project flops
While the rigs are up and upstream field development is progressing, Eacop is falling behind the schedule set by the government for the first oil to flow in 2025 due to land acquisition headaches and delayed financial close after many risk-averse banks targeted as financiers pulled out of the project.
Deal with China CPP
However, the French energy giant has signed a deal with China Petroleum Pipeline Engineering (CPP) for the construction and supply of line pipe, a development that tilts the trans-border project to Beijing, where the biggest chunk of the loans is expected to come from.
CPP is a subsidiary of state-owned China National Petroleum Corporation (CNPC), and joins another state entity China National Offshore Oil Corporation (CNOOC), which owns a 28.33 percent stake in the Uganda oil and eight percent of Eacop.
Dennis Kakembo, an energy law specialist told The EastAfrican that the recent turn of events was largely expected.
“You have to look at where financing is coming from… Whether it’s construction, insurance, financing, these deals always go where the money for the project is sourced,” he said.
Last year, Eacop managing director Martin Tiffen announced that Australian firm Worley was tipped for the engineering, procurement and construction management tender while Italy’s ISOF Construzioni SRL was evaluated to manage the coating plant for the pipes and fittings, now taken over by CPP.
“If the Europeans were financing the project, you would expect them to influence their companies to take up these deals,” Mr Kakembo noted, referring to a string of European and American banks that have opted out of the project’s financing, citing climate risk and human rights issues.
Before CPP, the pipeline deal worth $165 million was lined up for ChelPipe, the Russian manufacturer of welded and seamless steel pipes, but the company was ejected from the tender after the US and Europe slapped sanctions on Russia after it invaded Ukraine in February 2022.
Walked away
And now Stanchart has walked away, leaving China as the only realistic source of finance for the project, according to industry experts.
But NJ Ayuk, executive chairman of the African Energy Chamber, argues that Stanchart’s pull-out “is inconsequential” but adds that the Eacop shareholders, particularly TotalEnergies, will have to do the heavy lifting by taking a bigger chunk of the project’s equity financing to reduce the debt ratio.
“They have the balance sheet and Chinese financing,” he said of TotalEnergies.
Uganda government officials maintain that funding for the pipeline remains on track and multi-sourced from European, Middle East, African, and Asian financiers, particularly China. Energy Minister Ruth Nankabirwa has said the pipeline project “will get money” from Beijing.
Read: Uganda keeps oil dream alive
Last month, Eacop deputy managing director John Bosco Habumugisha said the governments had made good progress, raising 60 percent of the required financing for the project that is expected to unlock massive economic activity on the 1,443km-long corridor.
Last year, TotalEnergies CEO Patrick Pouyanné told shareholders that the amount of debt required for Eacop would be $2 billion and $3 billion.
Advisers
South Africa’s Standard Bank, Japan’s Sumitomo Mitsui Banking Corporation, and the Industrial and Commercial Bank of China, as well as the US insurance broker Marsh, are the advisers for financing and insurance packages for Eacop.
Confirmation of CPP deal means that Chinese firms are taking the lion’s share of the major contracts in Uganda’s oil projects after Sinopec was picked in 2021 as the joint main contractor alongside McDermott, for the Total-operated Tilenga project.
In February, another Chinese firm, China Petroleum Engineering and Construction Company (CPECC) finalised a deal with the French major to build ground facilities in the Tilenga oilfield.
Eacop is expected to transport 216,000 barrels-per-day of oil from Tilenga and Kingfisher oilfields in the Lake Albert basin to Tanga Port on Tanzania’s coast.
Between 2022 and 2025, the project is expected to undertake the land acquisition, contract award, detailed engineering, procurement, construction, and commissioning, including hydro-testing, and first oil from upstream facilities. But in May, there is no clear schedule when the contractors will get the green light to start construction.
Land acquisition stands at 85 percent in Uganda, and 98 percent in Tanzania of the compensation agreements signed, while compensations paid are at 76 percent and 97 percent respectively. Eacop officials in Kampala cannot say when this exercise will be concluded, citing a lack of requisite documents by project-affected persons.
Ahead in Tanzania
But in Tanzania, construction has started at the marine storage terminal in Tanga port and the coating plant site in Nzega District, while in Uganda, civil works will start at the main camp and pipe yard at Kakumiro, where land acquisition is complete.
Eacop is the largest oil pipeline project in the region, spanning a 30-metre corridor and 1443km length from start to terminal, developed to transport crude oil from Uganda to Tanzania from where it will be shipped to the international markets.
TotalEnergies holds the majority stake of 62 percent, while Uganda National Oil Company (Unoc) and Tanzania Petroleum Development Corporation hold a 15 percent state each, and CNOOC eight percent.
The project has been the target of a vicious campaign by local and international environmental and human rights activists, who say new fossil fuel projects are a ticking climate bomb that should be abandoned in favour of renewable energy.
Biggest heated pipeline
They also cite the fact that Eacop is the world’s biggest heated pipeline – the heating is meant to enable it to carry Uganda’s waxy oil – but the infrastructure crosses protected areas. Activists say the ecosystems in protected areas which the 50°C heated pipeline will cross will be harmed.
The European Union Parliament has backed the activists, and passed a resolution denouncing the project last year, arguing that the pipeline will produce 34 million tonnes of emissions per annum, hence posing a threat to local wildlife populations in conservation and protected and sensitive ecosystems.
But Peter Muliisa, chief legal and corporate affairs officer at Unoc, said that the Eacop is a buried pipeline and a very low emitter.
“In terms of contribution to total oil and gas emissions, upstream contributes 10 percent. Midstream, which is where the pipeline falls, is the least emitter; it contributes five percent. The rest of the emissions come from usage, and that’s downstream. So, if you look at the pipeline, it’s not emitting. Its mission is very limited,” he said.
Meanwhile, Uganda has from May 9-11 planned to host the 10th East African Petroleum Conference and Exhibition.
Eacop financing swings to China as its firms hog deals
Project is falling behind schedule after many risk-averse banks pulled out of the project.
www.theeastafrican.co.ke
Geza Ulole
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- Oct 31, 2009
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- #812
Geza Ulole
JF-Expert Member
- Oct 31, 2009
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- Thread starter
- #813
Geza Ulole
JF-Expert Member
- Oct 31, 2009
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Geza Ulole
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- Oct 31, 2009
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- #815
Chinese, African lenders to cover $1.8b Eacop funding shortfall
SUNDAY MAY 14 2023
Students in Kampala, Uganda hold placards as they march to the EU mission offices to deliver a petition against the EU parliament resolution asking its members not to support the East Africa Oil Pipeline on September 29, 2022. PHOTO | BADRU KATUMBA | AFP
Summary
Ayuk says the West should not dictate that Africa abandons its fossil fuel projects to decarbonise.
There are unconfirmed reports that Chinese giant ICBC moved an estimated $1-2 billion to Standard Bank of South Africa to capitalise the lender for lending to Eacop.
Kenneth Agutamba said Stanbic bank cannot comment on the transactional questions relating to the project due to client confidentiality provisions.
General ImageBy JULIUS BARIGABA
More by this Author
Sponsors of the East African Crude Oil Pipeline (Eacop) are looking for only $1.8 billion, which is expected to come from several Chinese lenders and two African banks, top officials of Uganda’s Ministry of Energy said on Friday.
“We are looking for $1.8 billion for the remainder on debt financing,” said Ugandan Energy Minister Ruth Nankabirwa.
“So far two companies from two African countries are offering,” the minister said, declining to name the companies or where they are domiciled.
She confirmed that equity financing for the project is fully paid up by its four shareholders.
However, the Permanent Secretary Ministry of Energy Irene Batebe told TheEastAfrican that most of the money required to complete the project’s debt financing will come from the “main Chinese banks”, Afriexim Bank and other African “funders that we cannot mention for now.”
Sources close to the project mentioned China Exim Bank, a long-time lender to Uganda’s infrastructure projects, as one of the financiers expected to provide some of the loans for the $5 billion project that will transport Uganda’s oil over 1,443km from Lake Albert oilfields to the Tanzania port of Tanga.
Industry analysts say that the growing number of Chinese companies getting project contracts for upstream production and Eacop suggests that China is the source of loans, and Beijing is leveraging on this to influence its firms' getting business.
Last month, China Petroleum Pipeline Engineering signed a deal for construction and supply of line pipe for Eacop, making it the fourth Chinese firm with big money tender in the oilfield's development contracts and export pipeline deals.
Lead investor
French supermajor TotalEnergies is the lead investor in the pipeline project with 62 percent stake while the Uganda National Oil Company and Tanzania Petroleum Development Corporation each own a 15 percent stake. China National Offshore Oil Corporation owns eight percent stake.
TotalEnergies site in Buliisa, Uganda
TotalEnergies' central processing facility under construction in Buliisa, Uganda on February 20, 2023. PHOTO | BADRU KATUMBA | AFP
Eacop is financed 60 percent debt and 40 percent equity, with debt estimated at $2-3 billion, according to TotalEnergies shareholders meeting records for 2022.
During the just concluded 10th East African Petroleum Conference and Exhibition in Kampala, speakers, including the executive chairman of the African Energy Chamber NJ Ayuk, guaranteed the success of the cross-border project because “no pipeline project has ever failed due to financing”.
Ayuk, a passionate defender of Africa’s use of its minerals, oil and gas resources for energy transition, says the West should not dictate that Africa abandons its fossil fuel projects to decarbonise as this would hinder industrialisation programmes, condemning populations to poverty.
“No one should make any apologies for using their resources to get their people out of poverty,” he said.
We could not confirm if one of the African banks mentioned is Standard/Stanbic bank, which besides being a financial giant on the continent, is also one of the transaction advisers, alongside Japan’s Sumitomo Mitsui Banking Corporation, and the Industrial and Commercial Bank of China (ICBC).
There have been unconfirmed reports within the project finance industry that Chinese giant ICBC moved an estimated $1-2 billion to Standard Bank of South Africa, where it is shareholder, to capitalise the lender for purposes of lending to Eacop, which advisers to the transaction cannot confirm.
Due diligence
Kenneth Agutamba, head of corporate communications at Stanbic Bank Uganda, said the bank cannot comment on the transactional questions relating to the project due to client confidentiality provisions.
The lender says its participation in the funding of the Eacop remains subject to its credit approval process, which includes consideration of the findings of the environmental and social due diligence assessments and meeting the Equator Principles requirements.
Demonstrations against Eacop in Uganda
Activists demonstrating against EACOP IN Kampala, Uganda on February 22, 2023. PHOTO | NMG
It is also subject to a full assessment of the Eacop sponsors’ climate change strategies and targets.
“Potential lenders, including Standard/Stanbic Bank, are relying on the services of an independent environmental and social consultant (IESC/LESC) to undertake their environmental and social due diligence.
“The LESC recently concluded an update of the environmental and social due diligence report which has been shared with the lenders for their consideration. The findings of the report are currently being reviewed by internal experts,” said Stanbic/Standard Bank, adding that project finance deals are subject to a full suite of due diligence to inform decision-making processes, covering legal, technical, security, market, reserves, environmental, social and other considerations.
www.theeastafrican.co.ke
MY TAKE
Will Taifa gas invest in EACOP too?
SUNDAY MAY 14 2023
Students in Kampala, Uganda hold placards as they march to the EU mission offices to deliver a petition against the EU parliament resolution asking its members not to support the East Africa Oil Pipeline on September 29, 2022. PHOTO | BADRU KATUMBA | AFP
Summary
Ayuk says the West should not dictate that Africa abandons its fossil fuel projects to decarbonise.
There are unconfirmed reports that Chinese giant ICBC moved an estimated $1-2 billion to Standard Bank of South Africa to capitalise the lender for lending to Eacop.
Kenneth Agutamba said Stanbic bank cannot comment on the transactional questions relating to the project due to client confidentiality provisions.
General ImageBy JULIUS BARIGABA
More by this Author
Sponsors of the East African Crude Oil Pipeline (Eacop) are looking for only $1.8 billion, which is expected to come from several Chinese lenders and two African banks, top officials of Uganda’s Ministry of Energy said on Friday.
“We are looking for $1.8 billion for the remainder on debt financing,” said Ugandan Energy Minister Ruth Nankabirwa.
“So far two companies from two African countries are offering,” the minister said, declining to name the companies or where they are domiciled.
She confirmed that equity financing for the project is fully paid up by its four shareholders.
However, the Permanent Secretary Ministry of Energy Irene Batebe told TheEastAfrican that most of the money required to complete the project’s debt financing will come from the “main Chinese banks”, Afriexim Bank and other African “funders that we cannot mention for now.”
Sources close to the project mentioned China Exim Bank, a long-time lender to Uganda’s infrastructure projects, as one of the financiers expected to provide some of the loans for the $5 billion project that will transport Uganda’s oil over 1,443km from Lake Albert oilfields to the Tanzania port of Tanga.
Industry analysts say that the growing number of Chinese companies getting project contracts for upstream production and Eacop suggests that China is the source of loans, and Beijing is leveraging on this to influence its firms' getting business.
Last month, China Petroleum Pipeline Engineering signed a deal for construction and supply of line pipe for Eacop, making it the fourth Chinese firm with big money tender in the oilfield's development contracts and export pipeline deals.
Lead investor
French supermajor TotalEnergies is the lead investor in the pipeline project with 62 percent stake while the Uganda National Oil Company and Tanzania Petroleum Development Corporation each own a 15 percent stake. China National Offshore Oil Corporation owns eight percent stake.
TotalEnergies' central processing facility under construction in Buliisa, Uganda on February 20, 2023. PHOTO | BADRU KATUMBA | AFP
Eacop is financed 60 percent debt and 40 percent equity, with debt estimated at $2-3 billion, according to TotalEnergies shareholders meeting records for 2022.
During the just concluded 10th East African Petroleum Conference and Exhibition in Kampala, speakers, including the executive chairman of the African Energy Chamber NJ Ayuk, guaranteed the success of the cross-border project because “no pipeline project has ever failed due to financing”.
Ayuk, a passionate defender of Africa’s use of its minerals, oil and gas resources for energy transition, says the West should not dictate that Africa abandons its fossil fuel projects to decarbonise as this would hinder industrialisation programmes, condemning populations to poverty.
“No one should make any apologies for using their resources to get their people out of poverty,” he said.
We could not confirm if one of the African banks mentioned is Standard/Stanbic bank, which besides being a financial giant on the continent, is also one of the transaction advisers, alongside Japan’s Sumitomo Mitsui Banking Corporation, and the Industrial and Commercial Bank of China (ICBC).
There have been unconfirmed reports within the project finance industry that Chinese giant ICBC moved an estimated $1-2 billion to Standard Bank of South Africa, where it is shareholder, to capitalise the lender for purposes of lending to Eacop, which advisers to the transaction cannot confirm.
Due diligence
Kenneth Agutamba, head of corporate communications at Stanbic Bank Uganda, said the bank cannot comment on the transactional questions relating to the project due to client confidentiality provisions.
The lender says its participation in the funding of the Eacop remains subject to its credit approval process, which includes consideration of the findings of the environmental and social due diligence assessments and meeting the Equator Principles requirements.
Activists demonstrating against EACOP IN Kampala, Uganda on February 22, 2023. PHOTO | NMG
It is also subject to a full assessment of the Eacop sponsors’ climate change strategies and targets.
“Potential lenders, including Standard/Stanbic Bank, are relying on the services of an independent environmental and social consultant (IESC/LESC) to undertake their environmental and social due diligence.
“The LESC recently concluded an update of the environmental and social due diligence report which has been shared with the lenders for their consideration. The findings of the report are currently being reviewed by internal experts,” said Stanbic/Standard Bank, adding that project finance deals are subject to a full suite of due diligence to inform decision-making processes, covering legal, technical, security, market, reserves, environmental, social and other considerations.
Chinese, African lenders to cover $1.8b Eacop funding shortfall
Analysts say the growing number of Chinese companies getting Uganda oil project contracts suggests Beijing is the source of loans.
www.theeastafrican.co.ke
MY TAKE
Will Taifa gas invest in EACOP too?
Geza Ulole
JF-Expert Member
- Oct 31, 2009
- 65,136
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- Thread starter
- #816
Geza Ulole
JF-Expert Member
- Oct 31, 2009
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- Thread starter
- #817
Geza Ulole
JF-Expert Member
- Oct 31, 2009
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- #818
DRC Looks at EACOP to Export Crude
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May 11, 2023
eacop
The Democratic Republic of the Congo (DRC) is looking at using the East African Crude Oil Pipeline (EACOP) to export oil from blocks in the country’s Albertine Graben basin.
The respective ministries of Uganda and the DRC met this week in Kampala to discuss the DRC’s access to the EACOP as well as the role the pipeline will play in getting DRC crude to international markets.
According to DRC Hydrocarbons Minister, Didier Budimbu Ntubuanga, discussions focused on bilateral relations, the development of hydrocarbons, and access to the EACOP for the transport of crude oil which will be extracted from the Albertine Graben in the DRC.
During the meeting, Minister Ntubuanga and his Ugandan counterpart, Minister of Energy and Mineral Development Dr. Ruth Nankabirwa Ssentamu, established a taskforce made up of technical teams from both countries, whose role is to assess the feasibility and strategy of the DRC’s tie-in. Upon the finalization of the report, a memorandum of understanding (MoU) will be signed between the two countries.
The meeting follows the DRC opening of a 30-block licensing round in 2022 covering blocks in the Albertine Basin – situated on the eastern border of the DRC and the western border of Uganda. Using the 1,143km EACOP – which links the Tilenga and Kingfisher oilfields in the Ugandan side of the Albertine Graben to international markets via the Port of Tanga in Tanzania – the DRC will be able to connect directly to regional and global markets. The EACOP is on track for first production in 2025.
energycapitalpower.com
Connect with us:
Facebook Twitter Youtube Linkedin
May 11, 2023
eacop
The Democratic Republic of the Congo (DRC) is looking at using the East African Crude Oil Pipeline (EACOP) to export oil from blocks in the country’s Albertine Graben basin.
The respective ministries of Uganda and the DRC met this week in Kampala to discuss the DRC’s access to the EACOP as well as the role the pipeline will play in getting DRC crude to international markets.
According to DRC Hydrocarbons Minister, Didier Budimbu Ntubuanga, discussions focused on bilateral relations, the development of hydrocarbons, and access to the EACOP for the transport of crude oil which will be extracted from the Albertine Graben in the DRC.
During the meeting, Minister Ntubuanga and his Ugandan counterpart, Minister of Energy and Mineral Development Dr. Ruth Nankabirwa Ssentamu, established a taskforce made up of technical teams from both countries, whose role is to assess the feasibility and strategy of the DRC’s tie-in. Upon the finalization of the report, a memorandum of understanding (MoU) will be signed between the two countries.
The meeting follows the DRC opening of a 30-block licensing round in 2022 covering blocks in the Albertine Basin – situated on the eastern border of the DRC and the western border of Uganda. Using the 1,143km EACOP – which links the Tilenga and Kingfisher oilfields in the Ugandan side of the Albertine Graben to international markets via the Port of Tanga in Tanzania – the DRC will be able to connect directly to regional and global markets. The EACOP is on track for first production in 2025.
DRC Looks at EACOP to Export Crude
The respective ministries of Uganda and the DRC met this week to discuss the use of EACOP to export oil from blocks in the DRC’s Albertine Graben basin
energycapitalpower.com
Geza Ulole
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- #819
Eacop Pipeline: China's $1.8 billion role in funding Africa's oil transport infrastructure
CHINEDU OKAFOR
May 15, 2023 9:45 AM
Eacop pipeline project
Eacop pipeline project
Chinese and African banks are anticipated to provide $1.8 billion in funding for the East African Crude Oil Pipeline (Eacop) project.
The project, which aims to transport Uganda's oil from the Lake Albert oilfields to the Tanzanian port of Tanga, will be financed primarily through debt financing.
China Exim Bank, known for its involvement in Uganda's infrastructure projects, is identified as one of the expected lenders for the Eacop project.
According to senior members of Uganda's Ministry of Energy, the East African Crude Oil Pipeline (Eacop) sponsors are only seeking $1.8 billion, which is anticipated to come from a number of Chinese lenders and two African banks.
“We are looking for $1.8 billion for the remainder on debt financing,” said Ugandan Energy Minister Ruth Nankabirwa. “So far two companies from two African countries are offering,” the minister added, refusing to disclose the name of the companies or where they are domiciled.
Irene Batebe, the Permanent Secretary of the Ministry of Energy, said that the "main Chinese banks," Afriexim Bank, and other African "funders that we cannot mention for now" will provide the majority of the funding needed to finish the project's debt financing.
Sources close to the project identified China Exim Bank as one of the financiers anticipated to provide some of the loans for the $5 billion project that will transport Uganda's oil over 1,443 km from the Lake Albert oilfields to the Tanzanian port of Tanga. China Exim Bank has a history of lending to Uganda's infrastructure projects.
Industry experts claim that Beijing is using the increased number of project contracts for upstream production that Chinese businesses are winning, together with Eacop's suggestion that China is the source of financing, to help its companies gain business.
The fourth Chinese company with a significant bid in the oilfield development contracts and export pipeline transactions was China Petroleum Pipeline Engineering, which signed a contract for the construction and delivery of line pipe for Eacop last month.
The pipeline project's principal investor is the French supermajor TotalEnergies, which has a 62 percent share. The Tanzania Petroleum Development Corporation and the Uganda National Oil Company each have a 15 percent stake. 8% of the company is owned by China National Offshore Oil Corporation.
According to the minutes of the 2022 TotalEnergies shareholders meeting, Eacop is funded by 60% loan and 40% equity, with the debt amounting to $2–3 billion.
Chinedu Okafor
CHINEDU OKAFOR
Chinedu is a Senior Reporter at Business Insider Africa with 5 years experience creating profoundly engaging and insightful content.
africa.businessinsider.com
CHINEDU OKAFOR
May 15, 2023 9:45 AM
Eacop pipeline project
Eacop pipeline project
Chinese and African banks are anticipated to provide $1.8 billion in funding for the East African Crude Oil Pipeline (Eacop) project.
The project, which aims to transport Uganda's oil from the Lake Albert oilfields to the Tanzanian port of Tanga, will be financed primarily through debt financing.
China Exim Bank, known for its involvement in Uganda's infrastructure projects, is identified as one of the expected lenders for the Eacop project.
According to senior members of Uganda's Ministry of Energy, the East African Crude Oil Pipeline (Eacop) sponsors are only seeking $1.8 billion, which is anticipated to come from a number of Chinese lenders and two African banks.
“We are looking for $1.8 billion for the remainder on debt financing,” said Ugandan Energy Minister Ruth Nankabirwa. “So far two companies from two African countries are offering,” the minister added, refusing to disclose the name of the companies or where they are domiciled.
Irene Batebe, the Permanent Secretary of the Ministry of Energy, said that the "main Chinese banks," Afriexim Bank, and other African "funders that we cannot mention for now" will provide the majority of the funding needed to finish the project's debt financing.
Sources close to the project identified China Exim Bank as one of the financiers anticipated to provide some of the loans for the $5 billion project that will transport Uganda's oil over 1,443 km from the Lake Albert oilfields to the Tanzanian port of Tanga. China Exim Bank has a history of lending to Uganda's infrastructure projects.
Industry experts claim that Beijing is using the increased number of project contracts for upstream production that Chinese businesses are winning, together with Eacop's suggestion that China is the source of financing, to help its companies gain business.
The fourth Chinese company with a significant bid in the oilfield development contracts and export pipeline transactions was China Petroleum Pipeline Engineering, which signed a contract for the construction and delivery of line pipe for Eacop last month.
The pipeline project's principal investor is the French supermajor TotalEnergies, which has a 62 percent share. The Tanzania Petroleum Development Corporation and the Uganda National Oil Company each have a 15 percent stake. 8% of the company is owned by China National Offshore Oil Corporation.
According to the minutes of the 2022 TotalEnergies shareholders meeting, Eacop is funded by 60% loan and 40% equity, with the debt amounting to $2–3 billion.
Chinedu Okafor
CHINEDU OKAFOR
Chinedu is a Senior Reporter at Business Insider Africa with 5 years experience creating profoundly engaging and insightful content.
Eacop Pipeline: China's $1.8 billion role in funding Africa's oil transport infrastructure
According to senior members of Ugandas Ministry of Energy, the East African Crude Oil Pipeline (Eacop) sponsors are only seeking $1
Geza Ulole
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- Oct 31, 2009
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Africa’s energy future and the fight over the EACOP pipelinePhoto credit: 350 Africa
Africa’s energy future and the fight over the EACOP pipeline
By Laureen Fagan on May 18, 2023
Carbon Neutrality Renewables Sustainable Development
Angola recently edged out Nigeria as the African continent’s top oil-producing nation, with the economies of both nations highly dependent on oil and gas revenues. Yet as the world moves toward a fossil-free future, there are no clear pathways on how to transform Africa’s extractive economies — and perhaps no project illustrates the problem more than the ongoing fight over the East African Crude Oil Pipeline Project (EACOP).
EACOP is a joint project of the governments of Uganda and Tanzania, where national oil companies hold 30% interest in the 1,443-kilometer pipeline. A China National Offshore Oil Corporation (CNOOC) subsidiary owns 8%, with the remaining 62% held by majority investor TotalEnergies, based in France.
Ugandan President Yoweri Museveni says oil will flow through the pipe by 2025, bringing much-needed revenue and energy access for regional development. But legal challenges and recent gains by project opponents, including pressure on banks that have backed out of the process, have made that timeline less certain.
The Sumitomo Mitsui Financial Group (SMBC Group) says it’s no longer an EACOP partner, while issuing a new “Strengthening Efforts Against Climate Change” investor report on Monday that details the firm’s climate risk reductions in the oil and gas sectors.
The London-based Standard Charter Bank says it won’t fund the project, either. In late April, the bank issued a “Net Zero Roadmap” statement that says it plans 29% reductions in the oil and gas sector by 2030, from its 2020 baseline, in keeping with International Energy Agency (IEA) guidelines on achieving the Paris Agreement target of 1.5°C in global temperature rise. The World Meteorological Agency recently made clear the threats to achieving the target.
The StopEACOP coalition, which includes highly visible climate actors like 350.org as well as local African leaders, says 49 major banks and insurance companies have decided not to support the Uganda-Tanzania pipeline. They include Germany’s Allianz, which said in an email to campaigners that the project “neither meets our climate ambition nor falls within our ESG risk profile.”
The project costs between $3.5 billion and $4 billion, with TotalEnergies claiming nearly $2 billion in investments earlier this month in a statement focused on what it calls “10 Misconceptions” about EACOP.
“The world still needs oil and reasonably priced oil, now and for a few years to come. This is the very purpose of the project, which provides for oil production over 20 years,” the company said.
“TotalEnergies does not intend to just produce Ugandan oil, which will be extracted in any case, but also to be a major player in renewable energy in Uganda and to meet the local population’s vital everyday needs through measures like electrification and access to water.”
The company also played down the pipeline impacts to water resources, biodiversity, human rights and the affected communities that lie on the EACOP route. About 5,000 people need to be relocated but their lives will improve, the company said.
Ugandan activists like Hilda Nakabuye, in Paris on Wednesday to place pressure on Total funder Crédit Agricole Group, say limiting fossil fuels is the only path forward and the pipeline is a “carbon bomb” for her nation. Yet elected officials, including Ugandan MP Thomas Tayebwa, have said interference with the project reflects “neocolonialism and imperialism” in the life of a sovereign nation that’s free to benefit from its own oil and gas resources.
The latter view is often taken by African governments and fossil fuel project leaders who argue that oil and gas promise to be transformative for their people. Yet, as World Resources Institute expert Sebastian Sterl makes clear, Africa’s energy systems face a promising future that can leave oil and gas behind.
“The goals of the Paris Agreement have urged some investors to back out of funding further fossil fuel projects. These mixed signals create uncertainty for investors and planners,” he writes. “Countries could be at risk of being left with stranded assets if they invested in new oil and gas infrastructure. And governments focused on fossil fuel extraction might miss out on clean alternatives (like green e-fuels).”
Tweets by Sustainability Times
www.sustainability-times.com
Africa’s energy future and the fight over the EACOP pipeline
By Laureen Fagan on May 18, 2023
Carbon Neutrality Renewables Sustainable Development
Angola recently edged out Nigeria as the African continent’s top oil-producing nation, with the economies of both nations highly dependent on oil and gas revenues. Yet as the world moves toward a fossil-free future, there are no clear pathways on how to transform Africa’s extractive economies — and perhaps no project illustrates the problem more than the ongoing fight over the East African Crude Oil Pipeline Project (EACOP).
EACOP is a joint project of the governments of Uganda and Tanzania, where national oil companies hold 30% interest in the 1,443-kilometer pipeline. A China National Offshore Oil Corporation (CNOOC) subsidiary owns 8%, with the remaining 62% held by majority investor TotalEnergies, based in France.
Ugandan President Yoweri Museveni says oil will flow through the pipe by 2025, bringing much-needed revenue and energy access for regional development. But legal challenges and recent gains by project opponents, including pressure on banks that have backed out of the process, have made that timeline less certain.
The Sumitomo Mitsui Financial Group (SMBC Group) says it’s no longer an EACOP partner, while issuing a new “Strengthening Efforts Against Climate Change” investor report on Monday that details the firm’s climate risk reductions in the oil and gas sectors.
The London-based Standard Charter Bank says it won’t fund the project, either. In late April, the bank issued a “Net Zero Roadmap” statement that says it plans 29% reductions in the oil and gas sector by 2030, from its 2020 baseline, in keeping with International Energy Agency (IEA) guidelines on achieving the Paris Agreement target of 1.5°C in global temperature rise. The World Meteorological Agency recently made clear the threats to achieving the target.
The StopEACOP coalition, which includes highly visible climate actors like 350.org as well as local African leaders, says 49 major banks and insurance companies have decided not to support the Uganda-Tanzania pipeline. They include Germany’s Allianz, which said in an email to campaigners that the project “neither meets our climate ambition nor falls within our ESG risk profile.”
The project costs between $3.5 billion and $4 billion, with TotalEnergies claiming nearly $2 billion in investments earlier this month in a statement focused on what it calls “10 Misconceptions” about EACOP.
“The world still needs oil and reasonably priced oil, now and for a few years to come. This is the very purpose of the project, which provides for oil production over 20 years,” the company said.
“TotalEnergies does not intend to just produce Ugandan oil, which will be extracted in any case, but also to be a major player in renewable energy in Uganda and to meet the local population’s vital everyday needs through measures like electrification and access to water.”
The company also played down the pipeline impacts to water resources, biodiversity, human rights and the affected communities that lie on the EACOP route. About 5,000 people need to be relocated but their lives will improve, the company said.
Ugandan activists like Hilda Nakabuye, in Paris on Wednesday to place pressure on Total funder Crédit Agricole Group, say limiting fossil fuels is the only path forward and the pipeline is a “carbon bomb” for her nation. Yet elected officials, including Ugandan MP Thomas Tayebwa, have said interference with the project reflects “neocolonialism and imperialism” in the life of a sovereign nation that’s free to benefit from its own oil and gas resources.
The latter view is often taken by African governments and fossil fuel project leaders who argue that oil and gas promise to be transformative for their people. Yet, as World Resources Institute expert Sebastian Sterl makes clear, Africa’s energy systems face a promising future that can leave oil and gas behind.
“The goals of the Paris Agreement have urged some investors to back out of funding further fossil fuel projects. These mixed signals create uncertainty for investors and planners,” he writes. “Countries could be at risk of being left with stranded assets if they invested in new oil and gas infrastructure. And governments focused on fossil fuel extraction might miss out on clean alternatives (like green e-fuels).”
Tweets by Sustainability Times
Africa's energy future and the fight over the EACOP pipeline
African nations like Nigeria bank on oil and gas resources. But pushback against the EACOP project points to risk and the renewable future.
www.sustainability-times.com