The Uganda Refinery
The Uganda Refinery project includes the development of a sixty thousand (60,000) barrels of oil per day (bopd) refinery located in Kabaale -Hoima District, a two hundred, eleven (211)-kilometre multi-products pipeline from Kabaale to a distribution hub in Namwambula -Mpigi District, a refined product storage terminal in Namwabula – Mpigi and a raw water pipeline from the Lake Albert to the Refinery in Kabaale.
The Refinery project will be a private sector led project, with Government’s share held by the Uganda National Oil Company (UNOC), through its subsidiary Uganda Refinery Holding Company. East African Community partner states, Kenya and Rwanda, and TotalEnergies Exploration and Production Uganda (TEPU) have expressed interest in holding shares. The project will be funded through a debt-to-equity ratio of about 70:30. The Lead Investor will be responsible for raising the debt for the project. The Uganda Refinery project is estimated to cost around US$ 4 billion.
Kabaale (Hoima) Industrial Park
The Government identified and acquired twenty-nine (29) sq.km of land for the development of the Kabaale Industrial Park. The master plan for the Kabaale industrial park which will house an international airport, Refinery, crude oil and products storage, transmission hub, logistics warehousing, offices, petrochemical industries, and associated facilities was developed in 2018. The master plan provides for the development of utilities, infrastructure, and common services. The industrial park which is located in Kabaale, Hoima District is currently under development. Visit https://www.unoc.co.ug/kabaale-industrial-park-kip/ for more information.
Lead Investor for the Refinery
The Government of Uganda (GOU) entered into a Project Framework Agreement (PFA) with the Albertine Graben Refinery Consortium (AGRC) for the development of a sixty, thousand (60,000) barrels of oil per day (bopd) green field Refinery in Hoima, Uganda, on 10th April 2018. In June 2022, AGRC rebranded to the Albertine Graben Energy Consortium (AGEC). The AGEC consortium includes YAATRA Africa, Saipem S.p.A, Baker Hughes. The PFA is between GoU through the Ministry of Energy and Mineral Development (MEMD) and AGEC together with UNOC. The private developers have a 60% shareholding in the Refinery project.
Project Status
The development of a sixty thousand (60,000) barrel per day Refinery is being taken forward by Government. The Front-End Engineering Design (FEED) for the Refinery project was completed by the Lead Investors in August 2021 and subsequently approved by the Petroleum Authority of Uganda (PAU) in July 2022. Negotiations of the key Refinery Agreements including the Implementation Agreement (IA), Shareholders Agreement (SHA), Crude Oil Supply Agreement (CSA) are ongoing. The Refinery Final Investment Decision (FID) is expected to be achieved in June 2023.
Legal Framework
The National Oil and Gas Policy for Uganda 2008 recommends refining the discovered oil in-country to supply the national and regional petroleum product demand before consideration of exportation.
To facilitate achievement of this policy objective, the Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act 2013 was enacted by Parliament during February 2013 and became effective during July 2013 following Presidential assent. This Act provides for among others, the legal foundation for the development of a Refinery in Uganda and other Midstream infrastructure like pipelines and storage facilities.
Following enactment of the Midstream Act, the Ministry together with the other arms of Government put in place General Licensing, National Content and Health, Safety and Environment (HSE) regulations to operationalize the Act.
Land Acquisition
The acquisition of the land required for the refinery commenced in 2012 with the preparation of a Resettlement Action Plan (RAP) for Project Affected Persons (PAPs) and was concluded. Overall, two thousand, six hundred, seventy (2,670) people were affected by the project. The PAPs were either given cash compensation or resettled to a near by location acquired by Government.
The Government constructed houses for seventy-two (72) PAPs who opted for physical resettlement and in addition provided them with their farmland equivalent. The land titles for the houses and farmland were handed over to seventy-two (72) PAPs in Kyakaboga – Hoima District as part of the RAP implementation for the Refinery project on 19th May 2022.
