Uganda Oil Refinery

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Uganda Oil Refinery
Uganda Oil Refinery is located in Uganda
Uganda Oil Refinery
Location of Uganda Oil Refinery
Country Uganda
Province Buseruka Subcounty
Hoima District
Western Uganda
City Kabaale Township
Coordinates Lua error in package.lua at line 80: module 'strict' not found.
Refinery details
Commissioned 2020 (Expected)[1]
Capacity 30,000 bbl/d (4,800 m3/d)

The Uganda Oil Refinery is a planned crude oil refinery in Uganda.[2]

Location

The refinery will be built on a 29 square kilometres (11 sq mi) piece of land in Kabaale Township, Buseruka Sub-county, Hoima District, Western Region, near the international border with the Democratic Republic of the Congo, along the eastern shores of Lake Albert.[3] This will be close to Uganda's largest oil fields in the Kaiso-Tonya area, approximately 60 kilometres (37 mi), by road, west of Hoima, the location of the district headquarters.[4] Tonya is approximately 260 kilometres (160 mi), by road, north-west of Kampala, Uganda's capital and largest city.[5]

Overview

Uganda has proven crude oil reserves of 6.5 billion barrels, about 2.2 billion of which is recoverable.[6] The International Monetary Fund was quoted in 2013 as saying that these reserves are the fourth-largest in sub-Saharan Africa, behind Nigeria, Angola, and South Sudan.[7]

Some of the largest oil fields are in the Kaiso-Tonya area in Hoima District. This area has been selected for Uganda's only oil refinery.[8] The strategy is to build a refinery that meets the petroleum products needs of Uganda and its regional neighbors, with any remaining to be exported.[9][10]

In addition to the refinery, a new airport[11] and a hospital[12] are planned. The Hoima–Kaiso–Tonya Road, which connects Hoima to Kaiso and Tonya along the eastern shores of Lake Albert, passes through Kabaale Village where the refinery will be located.[13] Also planned is the Nzizi Power Station, a 52 megawatt thermal power plant, using natural gas and heavy fuel oil as raw material.[14] The cost of the refinery is estimated to be US$4.3 billion, with 70 percent of that amount to be borrowed and the remaining 30 percent coming from shareholders.[15]

Two intake pipelines and one distribution pipeline, with a total construction bill of over US$200 million, are planned to bring crude to the refinery and distribute the finished products to a new terminal in Buloba on the western outskirts of Kampala.[16] The government hired the Ramboll Group A/S, a Danish company, in July 2015 to conduct an "'early phase' detailed route and environmental study for an oil pipeline that will run from the Albertine Graben - Hoima to Buloba...."[17]

History

The government of Uganda has, from the beginning, preferred a small production capacity to prolong the longevity of its new oil discoveries.[18] This preference initially pitted it against the three major exploration companies in the country, which preferred rapid harvesting and export of the crude via pipeline to the Kenyan coast.[19]

In March 2013, the government of Uganda engaged the US-based energy investment and consulting firm Taylor Dejongh to carry out an international search for a strategic investor in the refinery.[20]

In October 2013, the government of Uganda invited interested parties to bid for the construction, operation, and 60 percent ownership of the refinery in a public-private partnership arrangement.[21][22]

In January 2014, the Ugandan government shortlisted the following six consortia out of fifteen applicants for possible selection as strategic investor in the refinery: China Petroleum Pipeline Bureau (from the People's Republic of China), Marubeni Corporation (Japan), Petrofac (United Arab Emirates), RT Global Resources (Russia), SK Energy (South Korea), and Vitol (the Netherlands).[23]

In June 2014, media reports indicated that four of the six companies had submitted detailed proposals for the construction of the refinery.[24] At that time, the firms still left in the bidding were China Petroleum Pipeline Bureau, Marubeni Corporation, RT Global Resources, and SK Energy.[25][26]

On 25 June 2014, it was reported that consortia led by RT Global Resources and SK Energy had emerged as the two best contenders. They were requested to make a last and final proposal so that the winner could be selected by the end of August 2014.[27]

On 17 February 2015, media reports indicated that the consortium led by RT Global Resources (also including Telconet Capital Limited Partnership, VTB Capital, JSC Tatneft, and the GS Engineering and Construction Corporation) had won the bid to build the refinery. The Ugandan government is expected to begin in-depth negotiations with the winning bidder for a binding agreement to construct the refinery. The negotiations are expected to last about 60 days. If the parties fail to agree on terms, the government plans to negotiate with the losing bidder to construct the refinery. Construction is expected to start during the second half of 2015.[28][29][30][31][32]

Ownership

The consortium led by RT Global Resources will own 60.0 percent of the refinery.[33]

The government of Uganda has proposed that the remaining 40.0 percent be divided among itself, Burundi, Kenya, Rwanda, and Tanzania in equal shares,[15] except that Uganda would assume whatever ownership interests are not subscribed by the other countries.[15][34]

Kenya has agreed to purchase a 2.5 percent interest in the refinery for an estimated KSh:5.6 billion.[35][36] It has not decided whether to increase that interest to the maximum of 8.0 percent, saying that it needs to further evaluate the project's commercial value in light of the government's budgetary constraints.[15]

Burundi and Rwanda have submitted letters of interest to Uganda.[37] Burundi has not decided the extent of its ownership interest, waiting on the feasibility study of the refinery and a detailed statement of anticipated costs.[37] Tanzania has said that it will decide on its ownership interest at the time it considers appropriate.[15]

See also

References

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  15. ↑ 15.0 15.1 15.2 15.3 15.4 Lua error in package.lua at line 80: module 'strict' not found.
  16. ↑ Lua error in package.lua at line 80: module 'strict' not found.
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  20. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  21. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  22. ↑ Lua error in package.lua at line 80: module 'strict' not found.
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  27. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  28. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  29. ↑ Lua error in package.lua at line 80: module 'strict' not found.
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  31. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  32. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  33. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  34. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  35. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  36. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  37. ↑ 37.0 37.1 Lua error in package.lua at line 80: module 'strict' not found.

External links

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