Business
Four firms submit refinery proposals
Publish Date: Jun 07, 2014
Four firms submit refinery proposals
The bidders are also expected to detail their health, safety, security and environment protection strategy
  • mail
  • img
newvision

By Ibrahim Kasita

Four firms have submitted proposals to the Government for the role of lead investors in developing the 60,000 barrels per day oil refinery and related infrastructure, the energy ministry has said.

The firms include the China Petroleum Pipeline Bureau (CPPB) from China, Marubeni Corporation form Japan, RT-Global Resources from Russia and SK Group from South Korea. However, two firms; PETROFAC from the United Arab Emirates (UAE) and VITOL SA from Switzerland, which had earlier expressed interest in the project, did not submit proposals.

“The response to our request for proposals attests to the competitiveness of Uganda’s refinery project and the East African region’s business environment that provides an excellent investment destination, Fred Kabagambe-Kaliisa, the permanent secretary in the energy ministry, said.

“We expect that the bids submitted will be in line with the Government’s requirements for a credible, experienced and financially capable partner to work with Uganda to develop a refinery.”

The development follows a bidders’ conference that was held in March 2014.

During the conference the prospective bidders were briefed on the project and they obtained clarifications regarding the requests for proposals, visit the refinery project site being acquired by the Government and some of the oil fields, and meet with the upstream oil companies to have a dialogue on crude supply arrangements for the refinery.

China Petroleum Pipeline Bureau and its consortium members have executed major refining and or 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 a number of countries, including the US, UK, India, Qatar, Russia, and Kazakhstan. RT — Global Resources is a state international (export) investment development company that finances large infrastructure projects.

The firm 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 which did not submit the proposals, indicated that they were opting to concentrate on their core business in engineering, procurement and construction for the upstream petroleum sub-sector.

VITOL SA cited internal reasons among the consortium members, which affected its submission.


An aerial view of an oil exploration site in Bulisa district

A press statement issued mid-this week said an evaluation team comprising of representatives from the Government and the transaction advisor, TaylorDeJongh, will undertake a detailed evaluation of the proposals during this month.

“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 statement read.

The technical evaluation, the ministry said, will include an assessment of the project implementation plan, relevant experience, operational plan, and local content strategy. The bidders are also expected to detail their health, safety, security and environment protection strategy together with a financial plan.

The financial plan should explain 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 evaluation criteria will include, but not be limited to, the overall technical experience and financial capacity and the development, financial and commercial plans submitted by the bidders,” Robert Kasande, the refinery project manager, explained.

“One of 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.”

Legal backing

The fourth objective of the oil and gas policy for Uganda is to promote value addition of the country’s oil and gas resources through in-country refining of crude oil.

The Government contracted a UKbased energy firm, Foster Wheeler Energy Ltd, to conduct a feasibility study on building a refinery in Uganda in 2010.

The study considered the crude production potential and also undertook a comparative analysis between building a refinery and a crude export pipeline to the Indian Ocean coast.

The enactment of the Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act 2013 gives legal foundation for the refinery development.


Also related to this story

Oil refinery investor to be announced in July

Uganda to award oil exploration licenses in 2015

Oil: inside trade hurts Uganda's local firms, economy

The statements, comments, or opinions expressed through the use of New Vision Online are those of their respective authors, who are solely responsible for them, and do not necessarily represent the views held by the staff and management of New Vision Online.

New Vision Online reserves the right to moderate, publish or delete a post without warning or consultation with the author.Find out why we moderate comments. For any questions please contact digital@newvision.co.ug

  • mail
  • img
blog comments powered by Disqus
Also In This Section
Govt kicks off 2016/17 budget consultations
The ministry of finance, planning, economic and development has released a time table for national budget consultations across the country that begins today August 31 up to Sept 11...
Youth told to form groups for govt support on bee farming
Youth interested in bee keeping have been advised to form groups to be able to get extensive training and information support from government...
Mobile money customers shoot to 19.5m
Registered mobile money customers have increased from 17.6 million to 19.5 million between June 2014 and June 2015, the central bank has disclosed....
COMESA in drive to harmonise grain standards
The Common Market for East and Southern Africa (Comesa) met Friday to kick start the process of harmonizing standards of maize grain across the region, and interpreting the existing standards...
Farmers tipped on minting money from honey
A symposium of farmers from Tanzania and Uganda were told that the global demand for honey is currently overwhelming the supply in the market....
New car dealers want used motor vehicles phased out
As Uganda prepares to launch its first locally manufactured automobile to the market in 2018, new car dealers have appealed to the government to begin phasing out the importation of used motor vehicles on the market....
Do you support KCCA'S move to ban campaign posters from the city?
Yes
No
Can't Say
follow us
subscribe to our news letter