The Ugandan Cabinet has given China National Offshore Oil Corporation- CNOOC Uganda Limited the go-ahead to construct a Liquefied Petroleum Gas (LPG) facility in the Kingfisher development area.
Addressing journalists at the Uganda Media Centre in Kampala on Wednesday, State Minister-in-charge of National Guidance Godfrey Kabbyanga said the approval was in response to CNOOC’s application licence submitted last year.
Eng Geoffrey Ogwang, the Commissioner Midstream (DOP) at the Ministry of Energy and Mineral Development, said the approval for the construction and establishment of the LPG facility is timely, aiming to complete it before the anticipated first oil drop in 2025.
He added the goal is to ensure that the facility is operational by the time oil extraction begins, mitigating the risk of gas flaring.
Ogwang highlighted that the inception of the LPG facility marks a significant step for Uganda in advancing its clean energy initiatives. Stressing the double benefit, he underscored that the produced LPG not only meets energy demands but also plays a crucial role in promoting environmental sustainability.
Apart from LPG, the leading Chinese oil giant in Uganda’s energy sector, holding one-third interests in both Exploration Areas and Kingfisher plans to harness electricity from the gas resources.
In 2022, the company submitted a license application to the Electricity Regulatory Authority (ERA) to initiate a 39.1MW gas-to-power project at the Kingfisher oil field.
Available information shows that the gas-to-power project is critical in ensuring that it meets its oil production target at the Kingfisher. From the non-technical summary, and environmental and social impact assessment report for the project, the oil company intends to produce 40,000 barrels per day. “9.1 MM standard cubic feet of gas: to be used to generate electricity and to produce LPG (liquid petroleum gas) for sale specifically into the local market,” the report reads in part.
The report also shows that Electricity will be generated at the Central Processing Facility from fuel gas used and supplied to project infrastructure by way of underground cables buried in flow line trenches. “In the first 10/11 years, the CPF will generate more electricity than the project needs, and CNOOC will sell it to the government through a connection to the national grid,” adds the report.
But, in the said 10 – 11 years the volumes of gas are expected to reduce, and power lines will be used in the reverse direction to import power from the national grid. However, as indicated in the report, the government will bear the responsibility for establishing and constructing the power line infrastructure.
Failure by the government to implement the necessary infrastructure before the commencement of oil production could potentially leave the company with no alternative but to resort to gas flaring. As per the Global Gas Flaring Reduction Partnership (GGFR), gas flaring is deemed a wasteful practice that involves burning a valuable energy source.
This energy source could be utilized to promote economic development, enhance energy security, and potentially substitute for more environmentally harmful energy sources.