Uganda chooses multi-country consortium to build new oil refinery
Kampala — Uganda chose a group that includes General Electric (GE) to build and operate a 60,000-barrels-a-day refinery that will process part of the crude extracted from fields being developed by Total and Tullow Oil Plc.
The Albertine Graben Refinery Consortium — which also includes Yaatra Ventures, Intracontinent Asset Holdings and Italy’s Saipem — was picked after a review of more than 40 companies, Uganda’s energy ministry said on Monday in a statement on its Facebook page.
The government expects to conclude a project framework agreement with the consortium over the next two months, the Kampala-based ministry said. Uganda has been seeking a new developer for the $4bn facility since negotiations with groups led by Russia’s RT Global Resources and South Korea’s SK Engineering & Construction collapsed.
"The consortium has proposed to government a financing approach and a path to establish, develop and operate a commercially viable refinery company with a strategic benefit to the country and the region," the ministry said. "The oil refinery is expected to spur growth of petrochemical and other related industries in Uganda."
The facility in Hoima district will initially have a capacity of 30,000 barrels a day. It will be supplied from 2020 by fields with a 6.5-billion barrel resource being developed by Total, London-based Tullow and China’s CNOOC.
While Uganda initially reserved 40% of the refinery for itself — with an option to sell part of that holding to regional countries including Kenya, Tanzania, Rwanda and Burundi — it hasn’t disclosed the share to be controlled by the consortium. Landlocked Uganda will build a refined-product pipeline from the oil fields to Kampala and a crude-export pipeline through neighbouring Tanzania.