East African pipeline doubts linger

Feb. 5, 2010 at 11:22 AM
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NAIROBI, Kenya, Feb. 5 (UPI) -- Plans to extend an oil pipeline to Uganda from its African neighbors are in doubt as concerns over the funding for the project lingers, executives say.

The Kenya Pipeline Co. acts as a key supplier for regional markets, distributing vital oil resources to land-locked countries in East Africa.

But plans to extend a pipeline to Uganda are in doubt nearly three years after Libya's Tamoil East Africa won the development rights for the project, Kenya's Business Daily reports.

Tamoil controls more than 76 percent of a joint venture tasked with building the pipeline after the Kenyan government gave up control because of a lack of funding.

Meanwhile, Uganda's interest in the project is in question as the country emerges with significant oil finds. London-listed Tullow announced in September that it uncovered 700 million barrels of oil in Uganda in deposits associated with Lake Albert.

KPC's pipeline plans are meant to expand the availability of petroleum in the region, though Selest Kilinda, the company's managing director, said financing the project is still in the negotiation stages.

"A final investment decision on the project is still awaited," he said.

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