Uganda Government sets date for start of oil refinery project

The Minister of Energy and Mineral Development, Ms Ruth Nankabirwa, has said the Final Investment Decision for Uganda’s Oil and Gas refinery project is set for June.

Addressing a press conference at the media centre in Kampala on Friday, Ms Nankabirwa said the Albertine Graben Refinery Consortium (AGEC), which won the contract for the refinery, is currently conducting environmental and social impact assessments on the project before start of work.

In 2021, AGEC submitted the Refinery Project’s Front End Engineering Design (FEED) to Petroleum Authority Uganda, which accordingly approved it in July 2022.

The Uganda Refinery Holding Company Limited (URHC), a subsidiary of Uganda National Oil Company Limited (UNOC), will hold Uganda’s commercial interests on behalf of the Government of Uganda participating with up to 40% shares, according to initial plans.

According to Nankabirwa, the refinery project also has the component for the development of a refined petroleum products pipeline to evacuate refined oil products from the refinery in Hoima to a storage and distribution terminal at Namwabula in Mpigi District.
At least 72 percent of the 4,270 project-affected persons have signed memoranda of understanding for compensation, and payment of compensation stands at about 41 percent, according to Nankabirwa.

She says that currently, there are negotiations going on between oil and gas companies and the refinery consortium to reach an agreement that they will supply the crude to the refinery.

The project is expected to cost 4 billion dollars, but the Petroleum Authority of Uganda, PAU says the final figure should be clear after the announcement of the FID.

PAU Executive Director, Ernest Rubondo says the country should expect a lot of activity when the FID for the refinery is done including hiring, contract offers, and construction works. The refinery at the Hoima Industrial Park covers 5 square kilometers and will have the capacity to refine up to 60,000 dollars per day, according to Rubondo.

The consortium charged with the refinery construction will have to work within the timelines already provided by the FID for the Tilenga and Kingfisher, the crude production projects being handled by TotalEnergies and Cnooc Uganda Ltd respectively. 

Next week, Cnooc is expected to officially begin drilling its wells at an event to be presided over by President Yoweri Museveni.

With Kingfisher expected to produce 40,000 barrels of oil per day, it means all the crude produced there could be fed into the refinery and the rest, 20,000 delivered by TotalEnergies from Tilenga area.

This is also part of the negotiations that are going on to ensure that the two companies, the refinery consortium, and the government agree on the supply details, according to the ministry.

Nankabirwa says the two projects will be developed at the same time and that the two production sites will complement each to ensure continuity.