Oil Refinery Development

Project Coordinated by: 
Uganda

Following the discovery of commercial reserves of oil and gas resources in 2006, the Government of Uganda (GoU) put in place policy and legal framework geared to among others, adding value to the resources.  GOU agreed on the commercialization plan with the Upstream Licensees which includes oil and gas to power (about 150MW), refinery development, and a crude export pipeline. The Government plans to develop a 60,000 bbl/day refinery in a phased manner starting with 30,000 bbl/day to be commissioned 2018/2019 and expanded to full capacity two years later. The refinery project includes the following facilities;

  • Airport development with a 3.5km runway for handling heavy cargo
  • Waste treatment plants
  • Utilities
  • Petrochemicals, bitumen (future plan)
  • 205km, 14-inch multi-products pipeline interconnection from Hoima to Buloba near Kampala

The project is robust with an unlevered pre-tax NPV of USD1.525million and IRR of around 17.6%.
Investment amount required for the project is estimated to be approximately USD4.billion at +/-30% with a construction period of about 3 years.
Government is finalizing the acquisition of 29sk.km of land for the project.
The Project’s technical details are contained in a comprehensive report by M/S Foster Wheeler Energy Limited and to obtain the report, contact: refining@petroleum.go.ug

Project structure and ownership
The refinery is being developed on a Public Private Partnership (PPP) with 60% Private and 40% Public participation through project financing of debt – equity arrangement of about 70: 30. Government is in the final stages of identifying the Strategic Partner to take up the 60% shares of the project.
The East African Community Member States were invited to participate in the Public shares. Kenya has confirmed 2.5% shares participation, Rwanda and Tanzania expected to confirm shareholding participation soon.

Economic and social benefit of the project
The project beneficiaries include East African countries and neighboring states (DRC, South Sudan). The East and Central Africa relies on imported petroleum products. The planned refinery in Uganda will provide an alternative source of supply at better parity prices in addition to spurring related regional industrial and service industries.

Highlights/Achievements

  • Process of identifying Lead Investor in the final Stages
  • Acquisition of land for the project fast tracked
  • Fast tracked confirmation of participation of the EAC States