February 13, 2024 [Chimp Reports]- Uganda expects the United Arab Emirates (UAE) company, Alpha MBM Investments, to make its final investment decision in building the oil refinery in Hoima by the close of 2024.
“The final investment decision, which is proceeding with a project based on profitability, among others, is expected before the end of this year,” said Uganda National Oil Company (UNOC) said in a brief to ChimpReports on Tuesday.
“Key agreements namely Shareholders Agreement, Crude Suppliers Agreement, and Host Government have been drafted and await completion of negotiations with Alpha MBM Investments (now the lead partner) before they are signed,” UNOC emphasised.
UNOC further disclosed that construction and operationalization of the oil refinery is scheduled for 2025 and 2028 respectively.
The refinery project is one arm of the commercialisation plan for Uganda’s crude oil. The other one is the East African Crude Oil Pipeline (EACOP).
The refinery is expected to reduce Uganda’s reliance on petroleum imports.
“Due to the huge and ever-growing local and regional demand for the petroleum products, it was deemed necessary to have a refinery in Uganda to meet a bigger proportion of this demand,” said UNOC.
The facility will convert crude oil into more useful products, among them jet fuel, diesel, petrol and liquified petroleum gas (LPG).
Uganda imports over 2.5 billion litres of petroleum products valued at about US$2 billion annually.
The Government of Uganda, through UNOC, holds the majority shares in the Refinery Project. The rest will be held by joint venture partners.
UNOC is currently searching for a joint venture partner with the requisite financial capability.
These refined petroleum products will be transported by a multiple Product pipeline (Approx. 211Km) to the Kampala Storage terminal in Namwabula, Mpigi District for distribution to the bigger market in Kampala and beyond.
The heavy fuel oil (HFO) and liquified petroleum gas (LPG) will be transported by road and rail to the markets in Uganda and Beyond.
UNOC said the Front-End Engineering Design (FEED) for the Refinery was completed and approved by the government of Uganda.
The FEED focuses on the technical design requirements of the project as well as the investment cost to an accuracy of +/- 30%.
Additionally, the Environmental and Social Impact Assessment (ESIA) studies for the project are near completion and will be submitted to the National Environment Management Authority for approval.
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