Tanzania aims to set up oil trading hub in Tanga

2nd September 2016 By: John Muchira - Creamer Media Correspondent

Tanzania plans to establish an oil trading hub in the coastal town of Tanga to supply petroleum products to East and Central Africa.

Buoyed by Uganda’s decision to opt for the Tanzanian route for its crude oil export pipeline, the East Africa nation announced that plans are under way to transform Tanga into an oil trading hub.

Ample Land

Industry, Trade and Investments Minister Charles Mwijage says that Tanga has the potential to become a major oil trading hub in East Africa, owing to its strategic geographical location, its deep seaport, the availability of ample land for the construction of big storage tanks and railway links.

“Tanga should be an oil trading hub. The most ideal place [for an oil trading hub] in the East African region is Tanga. We have big opportunity for oil trading,” he says.

He adds that an oil trading hub in Tanga would help reduce freight charges from the source market, as large crude carriers could anchor there and transfer their cargo to other tankers to storage tanks.

Plans to turn Tanga, home to Tanzania’s second-largest port, into an oil trading hub have been boosted by Uganda’s choice of Tanzania as the preferred route for a $4-billion pipeline to transit oil from its recently discovered oilfields, in Hoima, to the coast. Initially, Uganda had wanted to construct a pipeline through Kenya.

Construction of the 1 403 km pipeline is expected to begin in January next year and to be completed by June 2020.

Oil Transfer

According to Mwijage, the Tanga port will be developed so that ship-to-ship oil transfer can be undertaken.

By targeting to become an oil trading hub in East Africa, Tanzania wants to emulate Singapore, which is the hub for oil products and gas trade in Asia, owing to its strategic location and world-class refining, storage and distribution infrastructure.