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Monday, June 02, 2014
Proposed Uganda refinery construction starts next year
KAMPALA, Uganda - The construction of the much awaited crude oil refinery at Kabaale village in Hoima district, western Uganda will start next year.
Kalisa Kabagambe, the Permanent Secretary in the Ministry Of Energy And Mineral Development was speaking to East Africa Business Week recently the sidelines of a China National Offshore Oil Corporation (CNOOC) event in Hoima recently.
CNOOC is the only oil firm to receive a production licence from government.
Without giving details, Kabagambe said the oil firms with whom government signed a Memorandum of Understanding (MoU) to undertake partial financing of refinery project have been doing evaluations.
“They (oil firms) are preparing for production which is expected to happen in 2017, they are getting ready. The construction of the refinery is expected to start next years,” Kabagambe said.
He also revealed that similar works on the pipeline from Hoima to Kampala will soon start to take the product to the market through to Kenya.
Oil firms Tullow Plc, Total E&P and CNOOC agreed on the cooperation framework to guide production, refining and export of oil products to other parts of the world.
The firms however are keen on the pipeline which will enable them to export the product via the Kenyan coast because the projected oil volumes will exceed national and regional demand.
Speaking in February, shortly after the signing of MoU with the three firms, the Minister For Energy and Mineral Development Irene Muloni together with oil firms officials called the signing a historic achievement for the oil and gas industry.
“The conclusion of the MOU is a significant step for Uganda as it gives a road map for achieving a harmonized commercialization plan for the development of the discovered oil and gas resources in the country,” Muloni told the media in Kampala.
Initially the refinery is expected to have a capacity of 60,000 barrels per day (BPD) which will double to 120,000 BPD when it reaches peak capacity, later after its completion.
Kabagambe said government through a protracted process is finalizing evaluation of licences before other companies Tullow and Total are given their production licences sometime this year. Uganda is sitting on an estimated 3.5 billion barrels of crude oil.
By Baz Waiswa, Monday, June 02nd, 2014