Tanzania and Uganda Partner with Vitol to Build Major East African Energy Hub
Tanga, 8 August 2026
Tanzania and Uganda have partnered with Vitol to develop a $20 billion energy hub at Tanga port, aiming to secure regional fuel supplies and lower transport costs.
A $20 Billion Vision for East African Energy
The non-binding Memorandum of Understanding (MoU), signed on Thursday, 6 August 2026, at the State House in Dar es Salaam, brings together the Tanzania Petroleum Development Corporation (TPDC), the Uganda National Oil Company (UNOC), and Vitol Bahrain EC [1][2][3]. Witnessed by Tanzanian President Samia Suluhu Hassan and Ugandan President Yoweri Kaguta Museveni, the agreement lays the groundwork for the Tanga Regional Energy Hub, which is projected to attract investments exceeding $20 billion, equivalent to over 56 trillion Tanzanian Shillings [1][3]. The ambitious plans include a new crude oil refinery in the coastal city of Tanga, storage terminals, a marine jetty, multi-product fuel pipelines, and gas infrastructure designed to link the two East African nations [1][3].
Redefining Logistics and Reducing Regional Reliance
Currently, Uganda is heavily dependent on external infrastructure, importing approximately 95% of its petroleum products—equivalent to nearly 2.96 billion litres annually—through Kenya via the Port of Mombasa and the Kenya Pipeline Company (KPC) system [2]. However, the logistical landscape is shifting; Vitol Bahrain, which acts as the exclusive supplier of petroleum products to Uganda, secured a 20.15% stake in KPC during its public listing in March after signing a $2 billion deal with UNOC last year [2]. By establishing a direct corridor through Tanga, Uganda and Tanzania aim to bypass traditional logistical bottlenecks, secure a more direct supply route, and lower fuel costs across East Africa [1][2].
Timeline and Broader Infrastructure Connections
The timeline for these massive infrastructure undertakings is already taking shape, with several key studies and projects nearing completion in late 2026 [1]. Feasibility and front-end engineering design studies for the refined products pipeline and Tanga storage terminal are scheduled for completion later in 2026, while studies for the proposed natural gas pipeline between Uganda and Tanzania are expected by October 2026 [1]. Furthermore, Uganda’s Kingfisher oil development is expected to commence production in a few weeks, feeding into the $5 billion, 1,443-kilometre East African Crude Oil Pipeline (EACOP) that is currently nearing completion to connect Ugandan oilfields to the Tanzanian coast [1][2].