Uganda invites two bidders to negotiate for refinery project

Two out of the four bidders that submitted proposals on May 30th to the Government of Uganda (GOU) for the development of a 60,000 barrels per day (BPD) oil refinery and related downstream infrastructure have been invited to progress to the negotiations stage of the tender process.

The two bidders that have been invited are:

• Consortium of RT – Global Resources (Russia), VTB Capital Plc (Russia) and JSC Tatneft (Russia).
• Consortium of SK Engineering and Construction, China State Construction Engineering Corporation and SK – KDB Global Investment Partnership Equity Fund.

According to sources, the proposal from Marubeni Corporation was not evaluated because it lacked a bid bond as required by the RFP, while China Pipeline Petroleum Bureau’s proposal did not adequately satisfy all the requirements of the RFP.

Mr. F.A Kabagambe-Kaliisa, Permanent Secretary of the Ministry of Energy & Mineral Development (MEMD) revealed:

“The RFP required the submission of a Bid Bond, and detailed technical, financial and commercial plans to develop, finance, build and operate the Project in partnership with the GOU, among other requirements. The bidders were also required to review and comment on draft Principal Project Agreements."

A team comprising of representatives of Government of Uganda supported by the Government’s Transaction Advisor, Taylor –Dejongh, evaluated the proposals during the last weeks.

The now bidders now will receive a Request for Best and Final Offer, which will be submitted by the end of August. The Government will then negotiate the Principal Project Agreements with the highest scoring Preferred Bidder. The first phase of the refinery is expected to be in place by 2017/2018.

Uganda’s refinery project is to be established under a public private partnership (PPP) contract with the Government holding up to 40% equity. It involves development of a refinery with a capacity of 60,000 BPD, development of crude oil and product storage facilities on site, as well as a 205-kilometer product pipeline to a terminal near Uganda’s capital city of Kampala.