Uganda Oil Refinery Project Details

Uganda Refinery Project – An Opportunity for Transformation 

Uganda, East Africa’s third-largest growing economy, is ripe for investment and holds abundant energy resources―approximately 1.2-1.7 billion barrels of commercially recoverable oil and 350 billion cubic feet of gas in The Lake Albert region.
Uganda’s rapid economic growth and substantial oil reserves are two factors that contribute to making it an ideal location for the construction of the nation’s first oil refinery. Once complete, the Uganda Refinery Project would serve as a gateway to East Africa, helping to deliver vital petroleum products to Ugandan citizens and those of neighbouring nations.

Project Overview 
• Refining capacity will be 60,000 BPD
• Located in Hoima, Western Uganda
• Crude oil for refinery will be procured from the oil fields currently developed by the Upstream Consortium comprised of CNOOC, Total SA and Tullow Oil
• Project will have a dominant position in East African markets
• Also includes development of crude oil and product storage facilities on site, as well as a 205-kilometer product pipeline to a terminal near the capital city of Kampala
• Will serve the demand for petroleum products in Uganda, as well as parts of Rwanda, Burundi, South Sudan, eastern DRC, western Kenya and northern Tanzania
• Will produce diesel, petrol, kerosene, jet fuel, LPG and HFO
• Construction is anticipated to begin in 2014 after a lead investor/operator is selected, with commercial production expected to start in the 2017 or 2018 timeframe

Additional Background
• The Government of Uganda will contribute 40 percent of Project equity
• A lead investor/operator will contribute 60 percent
• Uganda’s Ministry of Energy and Mineral Development (MEMD) is coordinating with the Upstream Consortium on a memorandum of understanding (MoU), which discusses the development of the refinery
• Through the MEMD, the Government of Uganda (GoU), is seeking a lead investor/operator for this Project
• Uganda’s Parliament enacted the Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act in February 2013, providing the framework for the development of the mid-stream petroleum sector in Uganda—including the Refinery Project

Uganda's First Refinery

Finally, the Request for Quotation for participation in the development of Uganda's 60,000 bpd refinery is out.

Uganda's Monitor Publication reports @ http://www.monitor.co.ug/Business/Commodities/Construction-of-Uganda-s-oil-refinery-to-start-in-2015/-/688610/2025358/-/h49dl3/-/index.html

"The government has started receiving bids from “appropriately qualified” investors to finance the country’s first Oil refinery complex whose construction is slated for 2015.

The 60,000 barrels-per-day refinery will be owned by the preferred investor/consortia in a [ratio] 60:40 Public-Private Partnership (PPP) with government, which called on other East African states to each buy a 10 per cent stake.

Commenting on the new development, the Energy ministry Permanent Secretary, Mr Kabagambe Kaliisa, said it marked, “the start of Uganda’s energy independence and will enhance the energy security by unleashing opportunity of our country’s rich oil resources, which some have described as the largest onshore oil discovery in Africa in the past 20 years.”

A landscape of 29 square kilometers in Kabaale Parish in Hoima District has already been secured to accommodate the $2.5 billion (Shs6 trillion) infrastructure, alongside an aerodrome, staff quarters, chemical treating plants, and other amenities like hospitals.

Mr Kaliisa added: “We are committed to a transparent process to develop Uganda’s first oil refinery.”
According to the Petroleum Exploration and Production Department (PEPD), the bidding firms are expected to submit their Statement of Qualification (SOQ) forms for the project within two months.

Development
The refinery will be developed in two phases, starting with 30,000 barrels-per day to allow oil production start in 2017 but another subsequent phase will be added by 2020. The government early this year contracted a US independent investment consultant, Taylor Dejongh, to offer transactional advice for the project and its financing. The consultant is also expected to review the SOQs, and manage the international competitive tenders, and advise on the appointment of the suitable consortium.

Any clue on the potential investors has been kept in the dark, but oil companies; UK’s Tullow Oil PLC and France’ Total (SA) currently undertaking oil exploration and are expected to provide the crude oil feedstock, distanced themselves from the project when contacted. Attempts to speak to the Chinese state owned, CNOOC were futile by press time, but the company has always expressed interest in helping government achieve the project reality.

Key issues in this include the capacity which is slated for 60,000 bpd. It shall be developed in 2 phases starting with 30,000bpd which capacity shall be subsequently scaled up.
The cost is also slated to be in the region of $2.5bn and shall be owned in a ratio of 60:40 with the investor taking 60% while the government takes the 40%.
The government stake shall be shared with other East African countries who may be interested in investing in the project.

Tullow Oil and Total E&P may not participate however CNOOC has in the past expressed interest in participating.