Uganda aims to accelerate refinery construction as bidders are unveiled

28th March 2014

By: John Muchira

Creamer Media Correspondent

  

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Uganda has announced plans to accelerate the construction of a planned petroleum refinery following the unveiling of six international companies bidding for the role of lead investor in the project.

State Minister for Energy Simon D’Ujanga says the process of evaluating bids and conducting due diligence on the capabilities of the shortlisted companies will be hastened and a winning bidder announced in the next three months.

The six shortlisted companies are Petrofac, of the UK; RT Global Resources, of Russia; China Petroleum Pipeline Bureau; SK Energy, of South Korea; Vitol, of the Netherlands; and Marubeni Corporation, of Japan. More than 50 international bidders were interested in developing the refinery.

The facility, which will have an initial capacity of 30 000 bb/d, gradually rising to 60 000 bb/d, is expected to cost $2.5-billion. Uganda envisages starting commercial production in early 2016.

According to tender documents, the Uganda government and its partners will raise 40% of the financing, while the winning bidder will be required to raise the remaining 60%.

Plans by the East African nation to award the contract before July come after the projec received a major boost from neighbouring countries. Kenya has announced it will take up a 3% shareholding in the refinery and invest $80-million. Uganda has also invited Tanzania, Rwanda and Burundi to participate in the project.

Uganda is developing the facility on a public–private partnership basis.


The Uganda government managed to unlock the standoff over the controversial refinery project sometime in February, after signing a memorandum of under- standing with three oil firms.

Crude produced by the three firms, Britain’s Tullow Oil, France’s Total and China’s CNOOC, will be shared between a thermal power generation plant, the planned refinery and an export pipeline.

Oil reserves in the East African nation are believed to be in region of 3.5-billion barrels.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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