Tanzania and Uganda have signed a memorandum of understanding (MoU) with global energy trader Vitol Bahrain to develop the port city of Tanga into a regional energy hub. The agreement, signed at State House in Dar es Salaam during a two-day working visit by Ugandan President Yoweri Museveni, is expected to attract investments exceeding $20 billion, according to Tanzania’s Minister for Energy Deogratius Ndejembi.
The partnership involves the Tanzania Petroleum Development Corporation (TPDC), the Uganda National Oil Company (UNOC), and Vitol Bahrain. The initiative aims to transform Tanga from a simple export terminal into an integrated center for petroleum storage, refining, logistics, trading, and distribution.
Infrastructure and Core Components
The proposed Tanga Regional Energy Hub is designed around four interconnected components: a crude oil refinery, a jetty for receiving shipments, a terminal tank farm for storing and loading refined products, and a pipeline to transport refined oil from Tanga to Uganda. Under this framework, crude oil originating from Uganda will be shipped to Tanzania for refining.
This project builds upon the East African Crude Oil Pipeline (EACOP), a 1,443-kilometre pipeline stretching from Hoima in Uganda to Chongoleani in Tanga. The EACOP is estimated at $6 billion in value and is nearing completion, with both governments targeting first exports later this year as Uganda begins commercial crude oil production.
Minister Ndejembi highlighted that while the EACOP transports molecules,
the Tanga Regional Energy Hub is intended to transform those molecules into prosperity by creating jobs, skills, technology transfer, and new businesses.
Regional Energy Security and Economic Value
The project seeks to reduce East Africa’s heavy reliance on imported refined products and foreign trading centers. Historically, East Africa has been a major buyer of refined oil from abroad despite possessing crude resources. According to reports, oil imports exceeded $2.1 billion in a single year, accounting for nearly 13.8% of all imports.
Uganda, as a landlocked nation, stands to benefit from improved fuel supply chains and lower logistics costs. Tanzania aims to solidify its position as East Africa’s energy and logistics gateway, leveraging its Indian Ocean location and existing investments in the ports of Dar es Salaam and Tanga.
Complementary Industrial Goals
Officials have clarified that the Tanga hub is not intended to replace other national projects. Uganda’s Minister of Energy and Mineral Development, Dr. Monica Musenero Masanza, stated that the hub complements Uganda’s planned 60,000-barrel-per-day Hoima refinery. Both ministers emphasized that these projects are designed to complement rather than compete with one another.
The project also follows broader regional discussions involving Kenya, Tanzania, and Uganda regarding a regional refinery modeled after Nigeria’s Dangote Refinery. Aliko Dangote, Africa’s richest man, previously offered to lead the construction of such a refinery if governments agreed to proceed.
Broader Bilateral Cooperation
The energy partnership extends beyond petroleum. Dr. Musenero Masanza disclosed other ongoing infrastructure projects between the two nations:
- Natural Gas Pipeline: Feasibility studies for a pipeline linking Uganda and Tanzania are in advanced stages and are expected to conclude by October 2026.
- Electricity Interconnector: A planned 400kV electricity interconnector is underway. Uganda secured $250 million in financing in June for its portion of the project following negotiations with the World Bank in March.
The interconnector is expected to increase electricity exchange between the two countries and strengthen the Eastern Africa Power Pool, creating new trade opportunities with Southern Africa.
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