A rig towering over the Buhuka flats on the shore of Lake Albert. Oil from this and other wells has to be refined for the local market. It is feared that the refinery will not be in place by end of 2025/Business Focus photo
The Uganda National Oil Company (UNOC) is pushing to have a refinery as part of the oil and gas commercialization plan.
Plans to have a refinery established in Hoima were disrupted at the end of June when an agreement with the American-led venture expired.
Albertine Graben Energy Consortium (AGEC) had been expected to make a Final Investment Decision to finance, develop, construct, and operate the Greenfield Oil Refinery estimated to cost US$ 4 billion.
The Private sector group which comprised YAATRA Africa, Italian Nuovo Pignone International Srl, LionWorks Group Limited from Mauritius, and Saipem p.A however did not conclude the key agreements with the government leading to the collapse of the previous agreement.
But even with that setback, Uganda National Oil Company’s Legal and Corporate Affairs Officer, Peter Muliisa says the refinery is part of the projects being pursued. He says the process of restructuring the team that will run the refinery is ongoing.
“We can commit to the country that the refinery is extremely important because of the Industry park that is being developed at Kabaale in Hoima. It is also a profitable project. It is going to help us with import substitution” he said.
Uganda, according to Muliisa imports petroleum products from the Gulf and India costing about 1.2 billion dollars annually.
“So imagine that money is spent here and we export some of the product to DRC and to the region. The impact we would have on our balance of trade and on our GDP is significant” said Muliisa whose company is also charged with the operations of Uganda Refinery Holding Company.
According to earlier arrangements, the government was to hold a 40% stake in the refinery while the private developers would have a 60% shareholding. Muliisa reveals that about $400 million for the government’s 40% equity holding in the refinery is part of 2023/202024 approved budget.
Uganda National Oil Company Limited (UNOC) holds Uganda’s commercial interests on behalf of the Government of Uganda (GoU), participating with up to 40% shares in the refinery Project.
The 60,000 barrels of oil per day refinery at Kabaale, Buseruka Sub-County in Hoima District was also expected to see the emergence of a petrochemical industry from its byproducts as part of Kabaale (Hoima) Industrial Park.
The design for the Refinery according to documents seen by URN had been designed Configuration processing Uganda’s crude oil into liquefied petroleum gas (LPG), premium and regular gasoline, jet fuel, diesel, and low-sulfur fuel oil.
The Petroleum Authority of Uganda (PAU) ins July last year approved the Front-End Engineering Design (FEED)
The FEED had been undertaken by Albertine Graben Energy Consortium (AGEC).
The Environment and Social Impact. Assessment (ESIA)of the project was yet to be submitted to the National Environment Management Authority.
The lapse of the agreement with AGEC means that a new investor should be taken on for fresh negotiations on aspects like shareholding, Crude Oil Supply Agreement (CSA) among others.
-URN
