Dar es Salaam, Tanzania — In a landmark move that promises to reshape East Africa’s energy landscape, Tanzania and Uganda have signed a Memorandum of Understanding (MoU) with global commodity trader Vitol Bahrain to transform Tanzania’s port of Tanga from a simple export terminal into a full-scale regional energy hub.
The agreement, signed on Thursday at State House in Dar es Salaam, was witnessed by Ugandan President Yoweri Museveni and his Tanzanian counterpart, President Samia Suluhu Hassan, during the Ugandan leader’s two-day working visit to Tanzania. The signatories included the Uganda National Oil Company (UNOC), the Tanzania Petroleum Development Corporation (TPDC), and Vitol Bahrain E.C..
Strategic Infrastructure Integration
The initiative builds directly on the nearly completed 1,443-kilometer East African Crude Oil Pipeline (EACOP), which will transport crude oil from Uganda’s Lake Albert fields to the Chongoleani terminal at Tanga. With construction now surpassing 90 percent completion, the pipeline is designed to carry up to 216,000 barrels per day, with potential capacity rising to 246,000 barrels.
Once operational, Uganda’s crude exports will flow through EACOP to Tanga, making the port city the gateway to global markets. The Tanga Regional Energy Hub will then integrate petroleum refining, storage, logistics, petrochemicals and cross-border energy infrastructure along Tanzania’s Indian Ocean coast.
Transforming Molecules into Prosperity
Tanzania’s Minister for Energy, Deogratius Ndejembi, captured the project’s ambition during the signing ceremony: “EACOP transports molecules. The Tanga Regional Energy Hub transforms those molecules into prosperity”.
He described the agreement as “a new chapter in East Africa’s economic integration” and “another bold statement that African countries can work together, not merely as neighbours, but as strategic partners capable of planning, financing and delivering transformative projects”.
The hub is expected to attract investments exceeding US$20 billion, making it one of Sub-Saharan Africa’s largest integrated energy developments. The project comprises four interconnected components: a crude oil refinery, a terminal tank farm for storing and loading refined products, a crude oil receiving jetty, and a bidirectional multiproduct pipeline linking Tanga and Uganda.
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Bidirectional Pipeline Innovation
Unlike conventional petroleum pipelines that transport products in one direction, the proposed bidirectional multiproduct pipeline will enable refined petroleum products to move between the two countries according to market demand.
“Petroleum products refined at Hoima will be transported to markets in Tanzania, neighbouring countries or for export through the Port of Tanga. Equally, when products refined or stored in Tanga are required in Uganda, Rwanda, eastern Democratic Republic of Congo or South Sudan, they will move efficiently through this corridor,” Ndejembi explained.
Complementing Regional Refining Capacity
Officials emphasized that the Tanga hub is designed to complement, rather than compete with, Uganda’s planned 60,000-barrel-per-day Hoima Refinery. Uganda’s Minister of Energy and Mineral Development, Dr. Monica Musenero, stressed that both projects are strategic partners in a wider vision.
“The hub is complementary. Together, these projects will strengthen regional energy security while enabling East Africa to retain more value from its petroleum resources,” she said.
Dr. Musenero revealed that feasibility and front-end engineering design studies for the proposed refined petroleum products pipeline and storage terminal are expected to be completed later this year, while studies for a proposed natural gas pipeline linking Uganda and Tanzania are scheduled for completion by October 2026.
Beyond Petroleum: Electricity Interconnector
The agreement also encompasses progress on the planned Uganda-Tanzania 400kV electricity interconnector. Uganda has secured US$250 million in World Bank financing for its section of the transmission line, which will increase electricity exchange between both countries and strengthen the Eastern African power pool.
Value Addition and Industrialization
Both ministers stressed that the initiative aligns with the African Union’s Agenda 2063, which prioritizes industrialization, regional value chains and value addition to Africa’s natural resources.
“We must ensure that we are not simply trading these resources as commodities; we need to extract greater value by developing secondary and tertiary industries, building the knowledge economy and creating high-skilled jobs in engineering, operations, maintenance, laboratory analysis and management,” Dr. Musenero said.
Benefits for Both Nations
For Tanzania, the project promises jobs, investment, and transformation into a regional logistics gateway. For landlocked Uganda, it secures critical export access and lower costs, while enabling the country to participate across the petroleum value chain instead of exporting crude oil alone.
“It will create industries. It will create jobs. It will create skills. It will create exports. It will create technology transfer. It will create new businesses. Most importantly, it will create prosperity for future generations,” Ndejembi declared.
The MoU builds on more than a decade of bilateral energy cooperation between Uganda and Tanzania, with its legal foundation stemming from the 2017 Uganda-Tanzania Inter-Governmental Agreement, followed by the 2021 Host Government Agreements and the EACOP Shareholders Agreement.
