By Nuzulack Dausen and Elias Biryabarema
DAR ES SALAAM, Tanzania/KAMPALA (Reuters) -Uganda and Tanzania have agreed to carry out a feasibility study for a pipeline linking Tanzania’s gas fields to Uganda, their energy ministers said on Friday, as the East African neighbours seek to progress a plan first announced in 2016.
Tanzania has an estimated 57.5 trillion cubic feet of recoverable natural gas and uses some of it to produce 64% of the 1,872 MW electricity on the grid, according to the ministry of energy.
Uganda has an installed generating capacity of about 1,500 MW reliant mainly on hydropower and is moving to diversify its sources of electricity and accelerate its energy transition.
Tanzania is currently awaiting cabinet approval for a $42 billion liquefied natural gas (LNG) project after completing negotiations in May with Equinor, Shell and Exxon Mobil. The project would unlock a natural gas deposit of more than 36 trillion cubic feet.
Tanzania’s Deputy Prime Minister and Energy Minister Doto Biteko said the signing of the agreement for a pipeline feasibility study followed a Memorandum of Understanding dating back to 2018.
“Time is running, we are behind time, let us make it happen,” Tanzania’s deputy prime minister and energy minister Doto Biteko said during a signing ceremony in the capital city Dodoma late on Thursday.
Ugandan Energy Minister Ruth Nankabirwa appealed to financing institutions, who have been cutting back on lending to fossil fuel projects, to offer cheap credit.
“I want to … ask those financing institutions that had dropped the idea of financing fossil fuels to come and finance this gas project because the gas is clean,” she said, without giving a timeline for the construction.
While natural gas produces half as much carbon dioxide when burned as coal and has been touted by some governments as a “transition fuel” to renewables, environmental advocates say increased use of gas could lock the world into a high-carbon and fast-warming future.
Together with France’s TotalEnergies and China’s CNOOC, Uganda and Tanzania are also developing a 1,445-kilometre-long pipeline to transport Ugandan crude oil to Tanzania’s Indian Ocean coast.
Uganda’s President Yoweri Museveni has in the past said he is keen to use the oil pipeline corridor to import natural gas from Tanzania.
Neither Biteko nor Nankabirwa specified whether the gas pipeline would be built from scratch or link to existing networks.
(Reporting by Elias Biryabarema and Nuzulack Dausen; editing by George Obulutsa, Elaine Hardcastle)