Tanzania, Uganda sign Vitol deal for Tanga energy hub that could draw over $20bn

Tanzania and Uganda have signed a non-binding agreement with Vitol Bahrain to develop a regional energy hub at Tanzania’s Port of Tanga, in a project that could attract more than $20bn in investment, Semafor reported.

The agreement brings together Tanzania Petroleum Development Corporation (TPDC), Uganda National Oil Company (UNOC) and Vitol Bahrain, part of global energy and commodities trader Vitol, which operates across crude oil and petroleum products trading, storage, shipping and energy infrastructure.

The Tanzanian government estimates that potential investment in new infrastructure, including storage facilities, could exceed $20bn, according to Semafor, although the parties have yet to provide a detailed breakdown of the proposed facilities or overall cost.

The project comes as Uganda moves towards its first commercial crude exports through the East African Crude Oil Pipeline (EACOP), which runs 1,443 km from the Lake Albert oilfields to Chongoleani near Tanga. TPDC said in July that the pipeline was 87% complete, with construction expected to be completed by the end of August and the first tanker expected to load Ugandan crude at Tanga in January 2027.

The proposed hub would further diversify Uganda’s fuel-supply routes, although Kenya remains overwhelmingly its main import corridor. UNOC said about 95% of Uganda’s petroleum products, equivalent to roughly 2.96bn litres annually, are imported through Kenya via the Port of Mombasa and the Kenya Pipeline Company system, with smaller volumes entering through Dar es Salaam and Tanga.

UNOC and Vitol Bahrain already have an extensive relationship. The Ugandan company has a fuel-supply arrangement with Vitol Bahrain and has secured approval to borrow up to $2bn from the company over seven years to support storage terminals, pipeline infrastructure, refinery-related development and other petroleum logistics projects.

The initiative comes as disruptions linked to the Iran conflict have heightened concerns across fuel-importing African economies over energy security, shipping routes and the resilience of petroleum supply chains, increasing the importance of additional storage and distribution capacity.

Uganda’s oil industry is centred on the Tilenga and Kingfisher projects in the Lake Albert region, which are being developed to feed EACOP. Tilenga is designed to produce about 190,000 barrels per day (bpd), while Kingfisher has planned capacity of about 40,000 bpd, according to UNOC.

As IntelliNews reported, Tanzania is also expanding regional energy cooperation beyond Uganda. Mozambique's National Petroleum Institute (INP) and Tanzania's Petroleum Upstream Regulatory Authority (PURA) signed an MoU in June covering petroleum data management, cost auditing, monitoring of petroleum operations, institutional capacity building and harmonisation of regulatory practices.