- Tanzania, Uganda and Vitol Move to Build Tanga Into East Africa’s Next Energy Hub
Tanzania and Uganda have signed a new agreement with global energy trader Vitol Bahrain to develop the Tanzanian port city of Tanga into a regional energy hub, in a move that could significantly reshape fuel storage, trading and logistics across East Africa.
The Memorandum of Understanding was signed in Dar es Salaam in the presence of Tanzanian President Samia Suluhu Hassan and Ugandan President Yoweri Museveni during the latter’s two-day working visit. The agreement brings together the Uganda National Oil Company, the Tanzania Petroleum Development Corporation and Vitol Bahrain E.C.
The project is expected to support petroleum storage, blending, logistics, marine services and fuel trading, broadening Tanga’s role beyond that of an export terminal and positioning the city as a more integrated regional energy centre.
For Tanzania and Uganda, the strategic logic is clear: retain more value from East Africa’s growing oil and gas resources rather than relying heavily on imported refined products and trading centres outside the region.
“This project is part of our commitment to adding value to our resources and enhancing economic cooperation,” President Samia said, adding that the initiative would create jobs, attract investment and allow citizens to benefit more directly from the energy value chain.
Uganda is expected to begin commercial crude oil production this year, with exports due to flow through the 1,443-kilometre East African Crude Oil Pipeline, or EACOP, to Tanzania’s Port of Tanga. Construction of the pipeline is nearing completion, with both governments targeting first exports later this year.
That infrastructure already makes Tanga critical to Uganda’s petroleum ambitions.
But the new agreement suggests both countries want to go further. Rather than using Tanga merely as the terminal through which Ugandan crude reaches international markets, the proposed hub could turn the city into a broader platform for storing, processing, trading and distributing petroleum products across the region.
That could materially alter the structure of East Africa’s fuel market.
For years, countries in the region have depended heavily on imported refined petroleum products and foreign trading houses. Building more storage, blending and logistics capacity locally could allow governments and regional companies to capture a greater share of the margins generated after crude is produced.
A larger regional energy hub would provide more flexibility around petroleum storage and distribution, potentially reducing the vulnerability of landlocked markets to disruptions along specific import corridors.
As a landlocked country, it depends heavily on access to neighbouring states for both imports and exports. Tanga provides Uganda with a direct route to the Indian Ocean and could become increasingly central to its energy strategy as domestic oil production begins.
The proposed hub could improve supply chains, lower logistics costs and strengthen access to international markets, while also creating greater optionality around where petroleum products are stored and traded.
The country already hosts the marine terminal for EACOP and has invested heavily in expanding the ports of Tanga and Dar es Salaam.
At the same time, it is pursuing major natural gas projects that could over time strengthen its position as a regional energy exporter.
The Tanga hub therefore fits into a wider strategy of turning Tanzania into one of East Africa’s principal logistics and energy gateways.
The involvement of Vitol adds commercial weight to the project. Vitol is one of the world’s largest independent energy traders and already has strong ties with Uganda through fuel-supply arrangements.
Its participation could provide trading expertise, market access and commercial experience needed to turn Tanga from an infrastructure project into a functioning regional energy marketplace.
The initiative also links to wider discussions over the future of refining capacity in East Africa. Earlier this year, Kenya, Tanzania, Uganda and other regional countries discussed the possibility of developing a regional oil refinery in Tanga, potentially modelled on Nigeria’s Dangote Refinery.
Aliko Dangote has also offered to lead the construction of the proposed refinery if governments decide to proceed.
If that proposal advances alongside the new storage and trading hub, Tanga could evolve into a far more comprehensive energy centre linking crude production, refining, storage, logistics and trading.
That would represent a significant step up in ambition. At present, much of Africa’s oil value chain remains fragmented. Many countries produce crude but export it in raw form, only to import refined petroleum products later at a higher cost. The result is a loss of potential value addition, foreign exchange and industrial development.
Tanzania and Uganda are effectively attempting to change that equation. By developing infrastructure around production and export, they could keep more of the commercial value generated from oil within the region.
A functioning energy hub in Tanga could serve markets across the East African Community, helping integrate fuel supply chains and creating a stronger regional trading platform.
That could support deeper economic integration at a time when African governments are increasingly looking to move from simple commodity exports towards value-added processing and regional industrialisation.
The project also highlights the growing strategic importance of infrastructure in Africa’s energy transition.
While much of the global conversation focuses on renewable energy, many African economies are simultaneously investing in oil and gas infrastructure to monetise existing reserves, improve energy security and reduce dependence on imported fuels.
For East Africa, the challenge will be to ensure that such investments translate into broader economic gains rather than merely higher export volumes.
That means building local skills, attracting downstream investment and developing supporting industries around logistics, storage, trading and processing.
If successful, the Tanga hub could help deliver some of those outcomes. It could create jobs, deepen regional fuel markets and provide a platform for future refinery or petrochemical investment.
Large energy infrastructure projects in Africa often face delays linked to financing, regulation, land acquisition and cross-border coordination.
The commercial viability of the hub will also depend on volumes, pricing and the willingness of regional markets to use Tanga as a preferred trading centre.
Tanzania and Uganda do not want to remain simply producers and transit states in the global oil trade.
If realised, the Tanga Regional Energy Hub could become one of East Africa’s most important energy gateways linking Uganda’s emerging crude production with Tanzania’s ports, regional fuel markets and international trading networks.
That would make Tanga not merely the end point of a pipeline, but potentially the centre of a much broader East African energy economy.
