Tanzania and Uganda Sign Agreement with Vitol for Tanga Energy Hub

The governments of Tanzania and Uganda have taken a major step toward reshaping East Africa’s petroleum supply chain.

Tanzania Petroleum Development Corp and Uganda National Oil Co Partner with Vitol Bahrain

The agreement brings together key state and corporate entities, uniting the Tanzania Petroleum Development Corp, Uganda National Oil Co, and Vitol Bahrain. While the precise scope and total cost of what will eventually be built at Tanga remain to be determined, Tanzania’s government indicated that potential investments in new infrastructure, such as storage facilities, could top $20-billion.

This initiative builds on existing supply ties in the region. Vitol Bahrain serves as the exclusive supplier of all petroleum products to Uganda. Last year, the firm signed a $2-billion deal with Uganda National Oil Co that helped secure a 20.15% stake in Kenya Pipeline Co during its public listing in March.

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Connecting the Port of Tanga to the EACOP Pipeline and Inland Markets

The Port of Tanga is rapidly developing into a critical energy node for East Africa. In addition to anchoring the new energy hub, Tanga serves as the end point for the East African Crude Oil Pipeline, known as EACOP, which is designed to transport crude oil from Uganda to global export markets. Uganda is scheduled to begin pumping crude later this year.

At the same time, the Tanga node is emerging as a vital route to help supply refined products to inland neighbors such as Rwanda. Historically, landlocked Uganda has depended heavily on maritime imports through Kenya. According to available reporting, Uganda imports roughly 95% of its petroleum products—amounting to nearly 2.96-billion litres annually—through Kenya via the Port of Mombasa and the Kenya Pipeline Co pipeline system.