Pipeline transit fees for landlocked oil producers, explained

The parts of a transit charge

The 2012 oil agreement between Sudan and South Sudan shows the main parts of a transit charge. It sets a processing fee, a transportation tariff for use of each pipeline system and a transit fee paid to the transit State ¹.

The same agreement added a one-off payment. The Transitional Financial Arrangement is a finite sum of US$3.028 billion, based on US$15.00 a barrel ¹.

In Uganda, the EACOP law sets a transportation tariff paid to the pipeline company for each barrel shipped ². In Chad and Cameroon, EITI reports record payments by the pipeline companies TOTCO and COTCO to each State ^4,5.

Sudan and South Sudan

South Sudan exports through two pipeline systems in Sudan to the Port Sudan marine terminal ^1,6. The 27 September 2012 agreement sets the fees per barrel below ¹. They apply to the South Sudan government's entitlement volumes only ¹.

Payments are based on volumes lifted at Port Sudan as shown on the bills of lading. They are paid in cash, invoiced in US dollars, within 40 days of the bill of lading date ¹.

Exports were disrupted in 2024. Sudan's petroleum minister declared force majeure in a letter dated 16 March 2024 after gelling and a rupture on the main line, as reported by Reuters ⁶. Talks on new fees in June 2025 ended without a final agreement, as reported by Amnon Jakony of Radio Yei ⁸.

Chad and Cameroon

Chadian crude reaches the sea through the Chad-Cameroon pipeline and is lifted at the KK1 terminal ³. Chad collects access rights from TOTCO and Cameroon collects transit rights from COTCO ^4,5.

Chad received 34.27 billion FCFA in TOTCO access rights in 2023, according to its 2023 EITI report. TOTCO and COTCO transport costs of US$62.80 million, or 37.95 billion FCFA, were deducted from the State's sales of crude received in kind ⁵.

Cameroon received 39.36 billion FCFA in COTCO transit rights in 2023, up from 36.51 billion FCFA in 2022 ⁴. Cameroon's pipeline monitoring committee CPSP reported 34.04 billion FCFA of transit fees from 1 January to 31 October 2022 on 38.6 million barrels lifted ³.

Uganda and Tanzania: EACOP

Uganda's East African Crude Oil Pipeline (Special Provisions) Act, 2021 sets the tariff for oil from existing Ugandan fields at US$12.77 a barrel. It applies until cumulative volume reaches 1,046,000,000 barrels (section 5(1)(a)) ².

From the first anniversary of first commercial delivery, the tariff rises each year by the lower of US consumer price inflation or 2% ². The tariff is not subject to further approval by any State authority (section 5(2)) ².

The State or the national oil company, as shippers, may pay the tariff in kind (section 8) ². Tariff income of the pipeline company is free of corporate income tax for ten years from first commercial transport and export (Schedule 2) ².

Niger and Benin

Niger and Benin signed a bilateral agreement on an export pipeline in January 2019, as reported by Ed Reed of Energy Voice. The line runs 1,980 km from Agadem in Niger to Seme in Benin, with 685 km in Benin and a capacity of 90,000 barrels a day ⁷. WAPCO Benin, a subsidiary of CNPC's unit CNODC, was named to finance it ⁷. The report did not give a transit fee ⁷.

What to check in a transit deal

• Which volumes the fees cover. The Sudan fees apply to South Sudan government entitlement oil only ¹.
• Who receives each charge, the transit State or the pipeline company ^1,2.
• The volume basis, such as barrels lifted at the export terminal ¹.
• Currency, payment timing and whether payment in kind is allowed ^1,2.
• Indexation of the tariff over time ².
• The term of the deal and what happens at expiry ^1,2.