Uganda issued a final tender to a company owned by TotalEnergies on Wednesday for the construction of a $3.5 billion oil pipeline from Uganda to Tanzania.
The final approval will pave the way for the building of the pipeline that would carry the nation’s crude to foreign markets.
The signature comes after the Ugandan cabinet gave its Monday approval for the East African Crude Oil Project Company Limited to build the pipeline.
TotalEnergies is the largest shareholder in EACOP with a 62% stake. Other investors include the state-run Uganda National Oil Company and Tanzania Petroleum Development Corporation, which have 15% each, while China’s CNOOC (0883.HK) holds 8%.
France’s TotalEnergies and the China National Offshore Oil Corporation signed a $10-billion agreement earlier this year to develop Ugandan oilfields and ship the crude through a 1,445-kilometre (900-mile) pipeline to Tanzania’s Indian Ocean port of Tanga.
The project, which includes drilling in Murchison Falls, Uganda’s largest national park, has run into strong opposition from activists and environmental groups that say it threatens the region’s fragile ecosystem and the livelihoods of tens of thousands of people.
Uganda’s President Yoweri Museveni has vowed to proceed with the project regardless of the EU resolution, warning that the government would look for other partners in case TotalEnergies chose to “listen to the EU Parliament”.
The project aims to extract the huge crude reserves under Lake Albert, a 160-kilometre-long natural border between Uganda and the Democratic Republic of Congo, and ship the oil through what would become the world’s longest heated pipeline.
Museveni has in the past hailed the project as a major economic boost for the landlocked country, where many live in poverty.