By Leilah Bbaale
The Final Investment Decision for Uganda’s Oil and Gas refinery project is set for June, this is according to the Ministry of Energy and Mineral Development.
The refinery was one of the three projects mooted more than a decade ago, but little has been said about it since the East African Crude Oil Pipeline project route was decided on in 2016.
This caused concern as to whether the government had been influenced by the oil companies to abandon the refinery in preference for the export pipeline.
The Minister for Energy and Mineral Development, Ruth Nankabirwa says that the Final Investment Decision for the refinery will be made by June this year so that the project is ready by the 2025 oil production deadline.
She says that currently, environmental and social impact assessments are ongoing, courtesy of the Albertine Graben Refinery Consortium which won the contract for the refinery.
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.
The government also proposed that the East African Community countries take shares in the project, alongside the oil companies, Total Energies, and Cnooc.
The Albertine Graben Energy Consortium (AGEC) submitted the Refinery Project’s Front End Engineering Design (FEED) to the Government in August 2021, and PAU accordingly approved it in July 2022.
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.
