Tanga Port energy hub raises the stakes as Tanzania and Kenya compete for East Africa’s energy trade
Tanzania and Uganda’s agreement with Vitol to develop Tanga Port into a regional energy hub could reshape how petroleum moves through East Africa, particularly as Uganda prepares to begin commercial oil production and Kenya pursues its own plans for a major refinery at Lamu. The immediate anchor is the East African Crude Oil Pipeline (EACOP), which is being built to transport Ugandan crude to Tanzania’s Indian Ocean coast for export. But the larger question is what happens around that pipeline once the oil reaches Tanga, and whether the port can become a commercial centre for storage, trading, refining and regional fuel distribution.
The agreement comes at a time when governments across the region are reconsidering the security of their energy supply. Uganda currently relies heavily on petroleum products imported through Kenya’s Port of Mombasa, giving the Kenyan corridor a powerful position in the regional fuel market. A sufficiently developed Tanga hub would provide Uganda with another coastal gateway while giving Tanzania an opportunity to capture more activity around the movement and processing of energy commodities.
Tanga’s role is expanding beyond Uganda’s crude exports
EACOP gives Tanga a major advantage because it brings a defined upstream supply stream to the port. Uganda’s crude will provide an initial commercial reason for storage, marine handling and export infrastructure, while Vitol brings experience in global oil trading, shipping, inventory management and petroleum supply chains. That combination could support a much broader operation than a terminal used simply to load Ugandan crude onto tankers.
The details of the proposed energy hub remain unclear, however, and that distinction is important. Tanzania has indicated that potential investment in infrastructure such as storage facilities could exceed $20 billion, but that figure should be understood as an indication of possible development at scale rather than money already committed to construction. Whether Tanga ultimately gains refining capacity, extensive fuel storage, trading facilities or new distribution links will depend on investment decisions that have yet to be fully defined.
If those pieces are built, Tanga could serve two different markets at once. It could move Ugandan crude towards international buyers while also becoming a source of refined petroleum products for countries that currently depend on imports through other coastal gateways. That would give the port a much more influential position in the regional energy system.
Kenya is building a competing regional energy corridor
The Tanga development is easier to understand when placed alongside Kenya’s plans for Lamu. The Kenyan government is backing a proposed 700,000-barrel-per-day refinery at Lamu, describing it as a strategic investment that could reduce dependence on imported petroleum products and supply markets across East Africa, including Uganda, Tanzania and South Sudan.
That creates a striking overlap between the two projects. Tanzania is developing an energy corridor around Tanga and EACOP, while Kenya is seeking to strengthen Lamu through refining and the wider LAPSSET transport network. Mombasa already has an established petroleum infrastructure and serves as a major gateway for the region, so Kenya has more than one route through which it can retain a role in East Africa’s fuel economy.
The competition will therefore be about more than which port handles the most crude. A refinery needs reliable feedstock, storage and customers; fuel traders need efficient terminals and shipping connections; landlocked countries need dependable inland transport; and all of these operations depend on financing, regulation and infrastructure that can support large volumes at competitive costs.
Lamu also illustrates the risks attached to ambitious energy infrastructure. Greenpeace Africa has raised concerns about the proposed refinery’s environmental approval and community participation, while questions remain around the project’s financing and the findings of its Environmental and Social Impact Assessment. Those issues matter because a regional energy strategy is only as effective as the projects that can actually be financed, approved and completed.
The real contest is over storage, refining and trade
For Tanzania, the commercial opportunity lies in moving up the energy value chain. Exporting Ugandan crude through Tanga would generate activity around the port, but storage, blending, refining, distribution and commodity trading could capture considerably more value.
Vitol’s involvement makes the trading element particularly relevant. A company with a global oil-trading operation can connect physical infrastructure with international crude and petroleum-product markets, making decisions about where commodities are sourced, stored, shipped and sold part of the business model. If Tanga acquires enough storage and handling capacity, the port could become useful even when a particular shipment is not Ugandan crude moving towards an overseas buyer.
That possibility could also alter the balance between Tanzania and Kenya in supplying the Great Lakes region. Uganda is the most obvious market because of its existing oil production and reliance on imported fuel, but Rwanda, Burundi, South Sudan and eastern Democratic Republic of Congo could become relevant as infrastructure develops. The economics will ultimately determine how far that reach extends, because distance, transport costs, taxes and border procedures can matter as much as the location of a refinery or port.
The region is therefore moving towards a more complicated energy geography. Mombasa has the advantage of an established supply chain, while Lamu offers Kenya a new industrial and logistics platform. Tanga has the advantage of being directly connected to Uganda’s crude through EACOP and could build a separate commercial ecosystem around that connection.
Oil security and the clean-energy transition will run together
The debate also needs to be placed within East Africa’s wider energy transition. Kenya is pursuing Mission 300 targets that include universal electricity access by 2030, greater clean-cooking adoption, nearly 6,000MW of installed renewable capacity and thousands of kilometres of additional transmission infrastructure. More than 80% of Kenya’s electricity generation already comes from renewable sources, led by geothermal, hydropower, wind and solar.
At the same time, Kenya is pursuing a major oil-refining project, while Tanzania and Uganda are investing in infrastructure linked to crude production and petroleum trade. That combination reflects the practical reality facing African economies: electricity systems can become cleaner while transport, industry and other parts of the economy continue to require liquid fuels.
The recent disruption around the Strait of Hormuz has made that vulnerability more visible. Countries that import most of their refined petroleum products remain exposed to international prices, shipping disruptions and geopolitical events even when they produce other forms of energy domestically. More storage capacity and additional import routes cannot eliminate those risks, but they can give governments and traders more options when supplies become constrained.
The same logic applies to renewable energy infrastructure. Discussions at African Energy Week 2026 are expected to focus on how investment in wind, solar and other technologies can support industrial growth, while initiatives involving Masdar and Africa50 are targeting large-scale renewable deployment. Africa’s energy infrastructure is therefore being built across several fronts at once, with oil and gas security existing alongside a push for cleaner electricity and industrial electrification.
Infrastructure will determine which corridor wins
The eventual importance of Tanga will depend less on the announcement itself than on what gets built around it. A port connected to EACOP can export Ugandan crude, but a genuine regional energy hub would require a much larger ecosystem involving storage, marine infrastructure, petroleum distribution, trading facilities and connections into inland markets.
That is also where Kenya retains substantial advantages. Mombasa already has established connections into the regional economy, while Lamu is being developed as part of the wider LAPSSET corridor. Kenya’s challenge is to turn its proposed refinery and transport infrastructure into commercially viable assets while navigating environmental, regulatory and financing questions.
Tanzania faces a different challenge: converting Tanga’s connection to Ugandan crude into a broader business that attracts traders, refiners, distributors and regional customers. Vitol can strengthen the commercial proposition, but the long-term outcome will depend on infrastructure scale, costs and the ability to connect the port efficiently to markets beyond Tanzania.
For Uganda, having more than one viable energy corridor could be valuable regardless of which country ultimately captures the larger share of the trade. A coastal route through Tanga reduces reliance on a single gateway, while additional refining and storage capacity in the region could give petroleum buyers more options during periods of supply disruption.
The larger story is therefore about who will control the infrastructure around East Africa’s energy flows. Uganda is bringing new crude production into the regional economy; Tanzania is positioning Tanga around that supply and the global trading system; Kenya is pursuing Lamu while retaining Mombasa’s established role. If these projects reach their intended scale, the result could be a more competitive regional energy market in which ports are no longer simply gateways for imported fuel or exported commodities, but platforms connecting production, processing, storage, finance and trade.
That would also change the economic meaning of Africa’s natural resources. The value would increasingly sit not only in extracting crude from the ground, but in the infrastructure and commercial networks built around it. For East Africa, the contest over Tanga, Lamu and the region’s established trade corridors could determine how much of that value remains within the region.
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