Lamu facing Tanga, Uganda at the heart of the new East African oil battle

On August 6, Tanzania and Uganda signed a memorandum of understanding with Vitol Bahrain to develop the Tanga Regional Energy Hub. Estimated at over $20 billion, the project aims to combine refining, storage, and export infrastructure along the Tanzanian coast.

The Tanga Regional Energy Hub is expected to include a refinery, a storage terminal, as well as a maritime dock. The overall goal is to create an integrated platform capable of processing, storing, and transporting petroleum products from Tanga, a port located in northeastern Tanzania.

The signature with Vitol Bahrain remains, at this stage, a memorandum of understanding. It establishes a framework for cooperation between the parties but does not necessarily constitute a final investment decision. The available information does not yet specify the timeline for completion, the refinery’s capacity, or the final financing structure.

For Uganda, access to coastal infrastructure is a strategic issue. The country lacks a maritime coastline and currently has to rely on regional transport corridors to supply its market with fuels and eventually export part of its oil production.

Tanga and Lamu at the center of regional competition

The Tanzanian project competes with Kenya’s ambitions around the port of Lamu. Nairobi aims to make this site an entry and exit point for hydrocarbons produced in the region, particularly those from the oil basins in northern Kenya and Uganda.

Uganda thus finds itself at the heart of the competition between the two ports. The development of its oil resources around Hoima must be accompanied by logistical solutions that allow crude to be transported to international markets while ensuring domestic supply of refined products.

The choice of transit infrastructures will have economic consequences for the concerned countries. The selected routes will determine transport costs, port revenues, associated investments, and the distribution of industrial activities along the regional corridors.

These projects are part of a broader strategy aimed at strengthening refining and storage capacities in East Africa. The region remains heavily dependent on imports of refined fuels, despite having oil resources that are still largely in the development phase.

For Vitol Bahrain, the agreement opens the possibility of participating in the construction of an integrated energy facility in an area set to become one of the continent’s new oil hubs. However, the realization of the project will depend on technical studies, financing agreements, regulatory approvals, and final investment decisions.