The Ugandan government has said that more than 40 firms have expressed an interest in the construction and operation of a proposed US$3.2bn oil refinery project in the East African country
Peter Lokeris, acting minister of energy and mineral development, said that his Ministry was now evaluating firms to establish technical competence and financial strength before a decision to award the contract would be made.
Lokeris said, “More than 40 companies are interested in this project and we are now conducting due diligence on them to establish their financial asset base.
“We are a land-locked country and we need a refinery to address our petroleum supply problems. We need a power plant that will use our crude oil to support the rural electrification project.”
With a commercially-established petroleum resource asset base of about four billion barrels in reserves, the East African country would deliver natural gas as the initial feedstock to supply a 50MW dual power station to increase electricity supply.
“We shall have a modular refinery starting with initial 30,000 bpd and then upgrade it to 60,000 bpd because the current recovery reserves can support this capacity,” the minister added.
The initial capacity is likely to remain steady till the central government can negotiate the best export route pipeline for international markets.
Tullow Oil and partners in Uganda initially wanted to construct a 1,300km pipeline from Lake Albert region to Mombasa Port for the crude oil to be sent to international markets. However, Lokeris revealed that the oil firms are now considering a new northern route — building a pipeline to Lira then connect Moroto to north western Kenya where some oil discoveries were made recently.
Recent feasibility studies for the development of refinery in Uganda confirmed it is economically feasible and beneficial to first build a refinery compared to constructing an export route pipeline.
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