Four companies submit proposals for development of Uganda's oil refinery
Jun 05, 2014
Four out of six shortlisted firms have submitted proposals to government for the role of lead investor for the development of the 60,000 barrels per day (BPD) oil refinery and related downstream infrastructure in the country.
By John Odyek
Four out of six shortlisted firms have submitted proposals to government for the role of lead investor for the development of the 60,000 barrels per day (BPD) oil refinery and related downstream infrastructure in the country.
Fred Kabagambe Kaliisa, permanent secretary ministry of energy and mineral development in a statement on Wednesday said: “The response to our Request for Proposal (RFP) attests to the competitiveness of Uganda’s refinery project and the East African region’s business environment that provides an excellent investment destination”.
Adding: “We expect that the bids submitted will be in line with Government’s requirements for a credible, experienced and financially capable partner to work with Uganda to develop a refinery.”
Government is acquiring 29 Square kilometres of land in Buseruka sub-county, Hoima district through implementation of a resettlement action plan that provides for compensation and resettlement of project affected persons. The land will be used to construct the refinery.
Kabagambe said the submission of the bids follows a bidders’ conference that was held in March, 2014 in Kampala, Uganda. The conference gave an opportunity to the prospective bidders to be briefed on the project and obtain clarifications regarding the Request for Proposal (RFP). They visited the refinery project site being acquired by government and some of the oil fields and met with the upstream oil companies to have a dialogue on crude supply arrangements for the refinery.
The four shortlisted firms and consortia that have submitted proposals are led by: the China Petroleum Pipeline Bureau (CPPB) from China, Marubeni Corporation from Japan, RT – Global Resources from Russia and SK Group from South Korea.
CPPB together with its consortium members have executed major refining and pipeline projects in India, Chad, Kenya, Thailand, Mozambique and China, among others. Marubeni Corporation has developed power projects, refineries, petrochemical plants, upstream assets and gas infrastructure in USA, UK, India, Qatar, Russia, and Kazakhstan.
RT – Global Resources is a state international (export) investment development company that finances large infrastructure projects. RT Global resources and its consortium members have developed key refining projects in Russia. SK Group owns the second largest refinery in the world of 1.12 million barrels per day.
PETROFAC from the United Arab Emirates and VITOL SA from Switzerland did not submit proposals. PETROFAC indicated that they were opting to concentrate on their core business in engineering, procurement and construction (EPC) for the upstream petroleum sub-sector. VITOL SA cited internal reasons among the consortium members.
Kabagambe said an evaluation team comprising of representatives from government together with government’s transaction advisor, TaylorDeJongh, will undertake a detailed evaluation of the proposals during June 2014.
The evaluation process is expected to take one month and after which, results will be announced. Negotiations are expected to be concluded by the fourth quarter of 2014.
“The evaluation criteria will include the overall technical experience, financial capacity, the development, financial and commercial plans submitted by the bidders. One of the government’s objectives is to select an investor that will develop a refinery to convert Uganda’s waxy crude oil into the desired petroleum products that meet set standards”, Robert Kasande, the refinery project manager in the ministry of energy said.
The technical evaluation will include an assessment of the Project Implementation Plan, relevant experience, operational plan, and local content strategy.
The bidders are expected to detail their health, safety, security and environment protection strategy together with a financial plan, which should outline the estimated capital costs of the project, how the investor will raise the required financing for the project, crude oil acquisition strategy and product sales plans.
The firm / consortia members are;
China Petroleum Pipeline Bureau (CPPB) led consortium: consists of Wuhan Petrochemical Engineering Design Company Limited, China Petroleum Jilin Chemical Engineering and Construction Company Limited, Shandong Dongming Petrochemical Group Company Limited and China Huanqiu Contracting & Engineering Corporation
Marubeni Corporation from Japan
RT – Global Resources (Russia) led consortium has VTB Capital Plc and JSC Tatneft.
SK Energy (South Korea) led consortium comprises of SK Engineering and Construction, China State Construction Engineering Corporation and SK – KDB Global Investment Partnership Equity Fund.
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