Tanga could become a major regional energy hub under plans by Tanzania and Uganda to build a large crude oil refinery in the port city, expanding the economic role of the area beyond transporting Ugandan oil for export.
Ugandan President Yoweri Museveni announced the plan on September 17, 2026, during the launch of oil storage tanks in Kampala, saying the refinery would be part of cooperation between the two countries to strengthen petroleum security in East Africa.
The proposed refinery would process crude oil from Uganda as well as other oil-producing countries, while Uganda would also establish a smaller refinery, according to Mr Museveni.
The announcement comes as Tanzania and Uganda advance the construction of the East African Crude Oil Pipeline (EACOP), which will transport crude from Hoima in western Uganda to the Chongoleani terminal in Tanga.
The 1,443-kilometre pipeline is expected to reach completion this year, paving the way for Uganda's crude oil to be transported to the Tanzanian coast for export.
Mr Museveni said the refinery project was aimed at strengthening oil security for Tanzania, Uganda and the wider East African region by increasing the region's capacity to process crude oil.
The move could also position Tanga as more than an export gateway, with the city potentially serving as a centre for refining, storage and distribution of petroleum products.
Tanzania's Permanent Secretary in the Ministry of Energy responsible for petroleum, Dr James Mataragio, said the proposed energy hub would create an opportunity for Tanzania to strengthen its position in the regional energy market.
He said the investment could also help promote development and improve petroleum supply security in the Southern African Development Community (SADC).
“This is an opportunity for Tanzania to position itself and stimulate development in the region,” Dr Mataragio said.
The Tanzanian delegation attending the Kampala event included Tanzania Petroleum Development Corporation (TPDC) Managing Director Mussa Makame and Petroleum Commissioner Godluck Shirima.
The refinery proposal adds to a growing portfolio of energy infrastructure linking Tanzania and Uganda.
The two countries are already implementing EACOP, while Tanzania is positioning Tanga as a strategic centre for petroleum infrastructure, taking advantage of its coastal location and links to regional markets.
For Uganda, the refinery would provide an additional option for processing its crude, while the Tanga facility could serve a wider regional market.
The development could also reduce the distance between crude production areas and refining and export infrastructure, although the scale, financing, construction timetable and final capacity of the proposed Tanga refinery have yet to be detailed publicly.
The two countries' cooperation in the petroleum sector has gained momentum alongside EACOP, which is expected to begin transporting crude once construction and commissioning activities are completed.
The pipeline will terminate at the Chongoleani Marine Terminal, where crude will be stored before being loaded onto tankers for international markets.
With the proposed refinery, Tanga's role could expand from an oil export terminal to an integrated energy centre handling crude processing, storage and distribution.
For Tanzania, the project could bring investment, industrial activity and logistics opportunities to Tanga, while providing a potential source of refined petroleum products for domestic and regional markets.