Uganda Launches New Crude Grade as First Oil Exports Near

Uganda plans to blend output from two Lake Albert developments into a new grade called Pearl Sweet as it moves toward oil exports. The Tilenga project, run by TotalEnergies, is estimated to hold roughly 1.2 billion barrels of recoverable resources and is targeted to produce about 190,000 b/d. CNOOC’s Kingfisher is said to contain about 270 million barrels and aims for 40,000 b/d. Together the two projects are expected to reach a plateau near 230,000 b/d, with crude unified at the Kabaale facilities in Hoima.

Pearl Sweet is notable for a low sulphur content of about 0.16% and an API gravity in the 27–28° range, but it is unusually waxy. That high wax content drives a pour point near 39°C, meaning the oil must be heated throughout the transport chain — from production facilities, through the export pipeline and terminals, to tankers during voyage. Handling and heating needs will raise operating costs and shrink the set of buyers able or willing to take the grade.

Export plans centre on the 1,443 km East African Crude Oil Pipeline (EACOP) to Tanzania’s Tanga port. The $5.6 billion pipeline, about 20% of which runs through Uganda, was designed for up to 246,000 b/d and includes 27 heating stations to hold the crude at roughly 50°C. Construction was reported at 92% complete in early September, but electricity connections remain a key hurdle: the route requires about 43 MW of power, roughly 2% of the combined production capacity of Uganda and Tanzania. Transport to Tanga is estimated to cost $12–13 per barrel before shipping and additional heating costs.

Uganda’s original first-oil target of June 2026 has been missed. Officials now expect Kingfisher to start at about 25,000 b/d in December and Tilenga in the first quarter of 2027, but UNOC’s announcement at the Singapore APPEC conference that a Suezmax shipment would sail in December is viewed as optimistic because production must first fill the pipeline and accumulate coast-side volumes. The example of South Sudan’s Dar Blend — where fighting halted heating and fuel supplies and gelled oil blocked a 1,500 km pipeline, constraining roughly 100,000 b/d until exports resumed in January 2025 — highlights the operational risks from power or fuel interruptions.

Commercially, Uganda will need buyers resilient to the crude’s extra handling burdens. Vitol has been appointed to market Uganda’s share, and Pearl Sweet will be priced against Brent with an expected discount. For reference, Nile Blend, another sweet/waxy grade marketed by Vitol, trades about $3.75–4/bbl below Dated Brent but has a pour point roughly 10°C lower than Pearl Sweet’s, implying Uganda may face a larger discount. Potential outlets include refiners producing very low sulphur fuel oil and petroleum coke — Vitol’s Fujairah and Malaysia refining assets are plausible offtake fits — while a planned 60,000 b/d domestic refinery could absorb about a quarter of plateau output if it proceeds (final investment decision targeted for February 2027). Environmental sensitivities, notably operations inside Murchison Falls National Park and concerns about emissions and the energy needed to heat the pipeline, add further commercial and political pressure on the project’s rollout.