Uganda to sign oil refinery PPP project in October

According to sources, the government of Uganda expects to conclude the negotiations for the 60,000 bpd refinery development PPP project and sign the Final Investment decision by October 2015.

Principal Engineer of the Refinery at the Directorate of Petroleum, Steven Enach, announced the news at an Oil and gas event in Kampala.

He said that the government has an inter-ministerial steering committee that is overseeing the process of the refinery development in support of the transaction advisory team.

Agreement to be signed include:

• The Project Framework agreement between government of Uganda and the lead investor; RT Global Resources,
• The Implementation agreement between government and the Refinery company and
• The Shareholder Agreement to be signed between the National Oil Company (NOC), The Refinery holding company and the lead Investor Special Purpose Vehicle.

Telconet Capital Ltd Partnership, VTB Capital PLC, Tatneft JSC and GS Engineering & Construction Corporation are part of the winning consortium.

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.

Steven Enach said government is concluding on the acquisition of 29 Km2 of land on which the project will be situated. The land supposed to include petrol-chemical industries, an industrial park and an airport.

In the meanwhile, the East Africa regional representative of Russian company, RT Global Resources, Andrey Kozenyashev voiced concerns about the project.

Kozenyashev warned:

“The road infrastructure is poor. Regardless of which port to be used including Mombasa Dar es Salaam or Lamu in future we will face problems while transporting heavy weight lift Cargo”

He also said that his company is concerned about the said 29 square kilometers which according to the project size is still so small to accommodate a refinery, Petrol-chemical industries, and industrial park and an airport. He said his company had recommended the government to build the airport at another place and was optimistic the proposal was considered.