Uganda, Tanzania and Vitol sign deal to develop Tanga hub

Uganda and Tanzania have signed an agreement with the global trading firm Vitol to develop the Tanzanian port city of Tanga into a regional energy hub, extending the Bahrain-based company’s growing footprint in Uganda’s petroleum sector.

The Memorandum of Understanding, signed on Thursday at State House in Dar es Salaam, brings together the Uganda National Oil Company (UNOC), Tanzania’s state-owned Tanzania Petroleum Development Corporation (TPDC) and Vitol Bahrain E.C., which will act as the project’s investor. The three partners will jointly develop petroleum storage, refining, logistics, trading and distribution infrastructure in Tanga. Their governments say the hub could attract more than $20bn (Ush74 trillion) in investment.

The signing was witnessed by Tanzanian President Samia Suluhu Hassan and her Ugandan counterpart, Yoweri Museveni, who was in Dar es Salaam on a two-day working visit at Samia’s invitation.

Vitol is already a central player in Uganda’s fuel supply. The company holds a seven-year partnership with UNOC, backed by financing of up to $2bn, to build petroleum storage, terminals, pipelines and related logistics, an arrangement that made it Uganda’s main channel for importing refined fuel. That deal took shape after Uganda moved to import petroleum products directly through UNOC rather than relying on Kenyan middlemen, a shift that strained relations with Nairobi over supply routes and pricing. Vitol’s entry into the Tanga hub widens that relationship from national fuel supply into a broader regional trading and infrastructure network.

The agreement builds on the East African Crude Oil Pipeline (EACOP), the 1,443km line under construction from Hoima in western Uganda to the Chongoleani terminal in Tanga. The 24-inch pipeline is designed to carry up to 216,000 barrels of crude a day to international markets, and Uganda is preparing to begin oil production before the end of 2026.

Uganda’s Minister of Energy and Mineral Development, Monica Musanza Musenero, welcomed Vitol into the partnership, saying collaboration between the two governments and the private sector would speed up regional economic transformation. She said the projects went beyond infrastructure and were designed to draw greater value from the region’s petroleum resources rather than exporting them as raw commodities.

“These are not merely infrastructure projects; they are strategic investments that will create jobs for our young people, deepen regional trade and strengthen the logistics systems that support our economies,” Musenero said.

She said feasibility and front-end engineering design studies for a proposed refined-products pipeline and storage terminal were expected to be completed later this year, while studies for a natural gas pipeline linking the two countries were at an advanced stage and due to conclude by October 2026. Musenero added that Uganda’s planned 60,000-barrel-per-day refinery at Hoima would complement the Tanga hub rather than compete with it.

Tanzania’s Minister of Energy, Deo Ndejembi, said Tanga had been chosen for its location on the East African coast and its existing energy transport infrastructure. He said the hub could draw investment exceeding $20bn, making it one of the largest integrated energy developments undertaken in sub-Saharan Africa.

“EACOP transports molecules. The Tanga Regional Energy Hub transforms those molecules into prosperity,” Ndejembi said.

Samia later hosted Museveni at a state luncheon in his honour.