Wood Mac: Uganda-Kenya pipeline vital for region

Dec. 18, 2013 at 8:05 AM
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HOUSTON, Dec. 18 (UPI) -- A proposed oil pipeline from central Uganda to the coast of Kenya could be a vital step toward unlocking East Africa's potential, Wood Mackenzie said Wednesday.

"There is huge untapped potential across both countries, with over 3.5 billion barrels of [expected] volumes in Kenya, and a further 1 billion barrels of [expected] reserves in Uganda," Martin Kelly, an African analyst for energy consultant Wood Mackenzie, said in a statement.

"The proposed pipeline is fundamental in unlocking value for both countries."

Wood Mackenzie estimates it will cost at least $4 billion to build an 869-mile long pipeline from central Uganda to the Kenyan coast.

Uganda is a landlocked country and the region in general lacks the infrastructure needed to take full advantage of the oil potential. Wood Mackenzie adds the type of oil found in Uganda needs to be heated in order to facilitate pipeline deliveries, which could complicate the proposed project.

The energy consulting group said the Ugandan and Kenyan governments have expressed support for the project. If developed, it could start delivering oil by 2019, the company said.

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