Uganda and Tanzania are planning a major expansion of their energy partnership, with the two countries targeting more than US$20 billion in potential investment to develop the Tanga Regional Energy Hub in northern Tanzania.
The initiative was formalised on August 6, when the Uganda National Oil Company (UNOC), Tanzania Petroleum Development Corporation (TPDC) and Vitol Bahrain E.C. signed a Memorandum of Understanding in Dar es Salaam. Presidents Yoweri Museveni and Samia Suluhu Hassan witnessed the agreement.
The proposed hub would build on the infrastructure being developed for the 1,443-kilometre East African Crude Oil Pipeline (EACOP), which is designed to transport Uganda's crude from Hoima to the Chongoleani terminal at Tanga. Rather than stopping at crude exports, however, the new plan seeks to turn Tanga into a broader energy and petroleum-processing centre serving markets across East Africa.
From crude export to regional energy corridor
At the centre of the proposal is a new refinery, alongside expanded petroleum storage, logistics, trading and distribution infrastructure.
The proposed refinery would process crude from both regional and international sources, creating additional refining capacity for East Africa as Uganda prepares to begin commercial oil production from the Kingfisher development.
One of the most significant pieces of infrastructure is a proposed bi-directional refined petroleum products pipeline linking Uganda and Tanzania.
Unlike a conventional one-way products pipeline, the proposed system would allow refined products to move in either direction depending on where demand is strongest. That flexibility could enable Tanga to supply Uganda and other inland markets while also allowing products to move toward Tanzania and wider regional markets when commercial conditions change.
Feasibility and front-end engineering design studies for the refined-products pipeline and storage terminal are expected to be completed later this year. Studies for a separate Uganda–Tanzania natural gas pipeline are scheduled for completion by October.
EACOP becomes the starting point
The proposed hub represents a significant shift in the purpose of the infrastructure being developed around Tanga.
EACOP was primarily conceived as an export route for Ugandan crude, moving oil from the Albertine region to Tanzania's Indian Ocean coast. The new Tanga strategy seeks to use that infrastructure base as a platform for activities further down the petroleum value chain.
Tanzania's Energy Minister, Deogratius Ndejembi, described the hub as the next phase of the energy partnership created by EACOP, with the focus moving from simply transporting crude toward refining, storage, logistics, trading and industrial development. Officials estimate that the wider development could attract more than US$20 billion in investment.
The timing is significant. Tanzania's state petroleum company said in July that EACOP construction had reached about 87% completion, with the project expected to reach full completion by the end of August. The Chongoleani terminal is expected to begin loading its first crude cargo in January 2027.
That creates the possibility of Tanga evolving from the destination of a single crude pipeline into the anchor point of a much larger regional petroleum network.
A different role from Uganda's Hoima refinery
The proposed Tanga refinery is not being positioned as a replacement for Uganda's planned 60,000-barrel-per-day Hoima refinery.
Officials say the two facilities would be complementary. Hoima would support Uganda's domestic refining and industrialisation objectives, while the Tanga hub would provide additional refining, storage and distribution capacity closer to the coast and international markets. The proposed bi-directional products pipeline could connect the two systems and allow refined products to move according to regional demand.
That model could also strengthen East Africa's ability to move petroleum products across borders rather than relying heavily on individual national supply chains.
Beyond oil
The proposed hub is also being developed alongside wider regional infrastructure.
Uganda has secured US$250 million from the World Bank for its section of a planned 400kV Uganda–Tanzania electricity interconnector. The project is intended to strengthen regional electricity trading through the Eastern Africa Power Pool and improve connections with Southern Africa.
For Uganda and Tanzania, the broader objective is therefore bigger than building another refinery. The countries are attempting to establish an interconnected energy corridor combining crude transportation, refining, petroleum products pipelines, storage, natural gas, electricity and logistics.
The challenge now is moving from an MoU and feasibility studies to bankable projects, financing commitments and final investment decisions.
If that transition succeeds, the legacy of EACOP at Tanga could extend well beyond the export of Ugandan crude. It could become the foundation for a regional energy hub capable of reshaping how petroleum is refined, stored and traded across East Africa.
References: https://www.theeastafrican.co.ke/tea/business-tech/uganda-tanzania-refinery-at-tanga-5550564?
https://www.tanzaniainvest.com/energy/uganda-mou-tanga-regional-energy-hub?
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