Tanzania and Uganda signed an agreement with Vitol, the world’s largest independent oil trader, to develop Tanga Port into a regional energy hub as the continent works to capture more value from its natural resources.
The partnership comes as Africa’s energy ecosystem is on the cusp of major change: Uganda is preparing to begin commercial oil production, with supplies due to flow through the still-under-construction East African Crude Oil Pipeline to Tanzania’s Tanga Port, ready for shipment to global markets.
Uganda currently imports most of its petroleum products through Kenya, via the Port of Mombasa. It’s unclear what the planned energy hub will entail, but Tanzania’s government said potential investments in new infrastructure, such as storage facilities, could exceed $20 billion, Reuters reported.
The Iran war has exposed how much many East African countries depend on fuel imports. The proposed Tanga Port development could radically alter regional dynamics by creating a refining and trading platform that connects upstream Ugandan crude, downstream refining, and new fuel logistics.