The Minister of Energy and Mineral Development Hon. Ruth Nankabirwa has revealed that the Final Investment Decision (FID) for Uganda’s Oil and Gas refinery project will be due by June 2023.
Deliberations on Uganda’s oil refinery began more than a decade ago, but were overshadowed by a new project on the block, the East African Crude Oil Pipeline (EACOP) project, especially after its route was decided in 2016.
Speculations emerged that government had actually abandoned plans for the construction of the refinery in favor of the EACOP, after being allegedly persuaded by several energy companies.
However, Hon. Nankabirwa clarified that the Final Investment Decision for the refinery will be due by June this year so that the project is ready by the 2025 oil production deadline.
For the project to materialize, environmental and social impact assessments must be conducted, something that is being spearhead by the US based energy firm, the Albertine Graben Refinery Consortium, which secured the contract for the construction of the touted refinery.
Uganda’s participation in the project will account for up to 40% shares, with the Uganda Refinery Holding Company Limited (URHC) representing government’s interests. (URHC) is a subsidiary of Uganda National Oil Company Limited (UNOC).
It has to be recalled that Uganda’s Oil and gas refinery project was approved by the Petroleum Authority of Uganda (PAU) in July 2022, after its Front End Engineering Design (FEED) was submitted by the Albertine Graben Energy Consortium (AGEC).
Accordingly, the completion of compensation for Project Affected Persons (PAPs) will be vital for the project to take off. Currently, the compensation process according to Hon. Nankabirwa stands at 14%, with 72% of the 4,270 PAPs singing Memoranda of Understanding with government for their compensation.
The Energy Minister underlined that currently, negotiations are ongoing between oil and gas companies to reach a final breakthrough for AGEC to supply the necessary crude to the refinery.
With the maximum capacity of 60,000 barrels per day, the refinery will be one of the biggest oil and gas infrastructure projects to reckon with, in Uganda and Africa at large, if completed.
Asides the EACOP, there will also be the institution of a refined petroleum products pipeline, through which refined oil products from the refinery in Hoima will be transferred to a storage and distribution facility,which will be situated at Namwabula in Mpigi District.
The refinery project is expected to cost 4 billion dollars, and its FID announcement is expected to heighten a lot of activity in the same domain, like recruitment of workers for the construction works to take center stage.
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