“Market sounds to gauge financing appetite” is said to be carried out for the proposed East African Crude Oil Pipeline (EACOP) by Japan’s Sumitomo Mitsui Banking Corporation Europe Ltd (SMBCE), Standard (Stanbic) Bank, and Industrial and Commercial Bank of China Limited (ICBC), the three financial advisors for France’s Total E&P, Uganda-Tanzania, and China’s CNOOC.
The response has been so far positive despite the technical Front-End Engineering Designs (FEED) for the 1,445km pipeline designed to run from Hoima to Tanzania’s southern Tanga Port are not yet in.
The tender for FEED was granted last December to Houston-based Gulf Interstate Engineering to look into the technical aspects to give a clear picture of the project, which is expected to give way for Final Investment Decision (FID), and subsequently lead to Engineering, Procurement and Construction (EPC) later next year.
Aside the advice on debt structuring (70 per cent of the projected $3.5b capital expenditure), SMBC, Stanbic and ICBC are also advising the parties – the oil companies, Total, CNOOC and Tullow; and the Uganda-Tanzania governments, on the 30 per cent equity structure.
Uganda’s equity of 15 per cent (out of 30 percent) will be done through the National Pipeline Company (NPC), a subsidiary of the Uganda National Oil Company (UNOC), which is responsible for the overseeing of the country’s commercial interests in the petroleum sector.
According to NPC general manger, Mr John Bosco Habumugisha, this 15 per cent translates into roughly $106m (approx. Shs377b) which will either be raised from the budget or government, could turn to its traditional lenders.