Museveni breaks ground for 320m-litre Kampala fuel storage terminal
President Yoweri Museveni laying the foundation stone for the Kampala Storage Terminal (Photos by Miriam Namutebi)
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President Yoweri Museveni on Thursday (September 17) commissioned the development of the 320-million-litre Kampala Storage Terminal at Namwabula village in Mpigi district, describing the project as a major milestone in strengthening Uganda’s petroleum security and capacity to supply fuel to domestic and regional markets.
The Kampala Storage Terminal, being developed by the Uganda National Oil Company (UNOC), is located on 300 acres of land and is expected to cost approximately USD 250 million.
The complex will serve as a receiving and distribution terminal for Uganda’s petroleum products from the planned refinery in Hoima.
The facility is designed to increase Uganda’s capacity to store refined petroleum products and strengthen the country’s strategic fuel reserves.
Uganda currently has an estimated national petroleum storage capacity of 160 million litres, comprising a 30-million-litre facility in Jinja, a 70-million-litre facility at Mahathi in Kawuku and about 60 million litres operated by private-sector fuel companies.
Currently, UNOC operates a single storage terminal in Jinja that was established in the 1970s, with a capacity of 30 million litres. The facility is currently small and can hardly hold products for over a week.
The launch attracted many dignitaries, including a team from Tanzania Petroleum Development Corporation.
Addressing the gathering, President Museveni said adequate storage infrastructure is critical as Uganda continues to develop its petroleum sector and pursue greater security of fuel supply.
Noting that Uganda’s existing petroleum storage capacity remains inadequate for the country’s needs, President Museveni said that the new terminal will contribute to the establishment of strategic reserves and improve the reliability and efficiency of fuel supply.
However, the President stressed that the project should not be regarded as the final solution to Uganda’s storage needs, saying the country must continue planning for larger facilities to meet its long-term petroleum requirements.
He commended Vitol Bahrain for supporting Uganda’s fuel supply chain through the supply of petroleum products on credit, with the Government making payments when funds become available.
He also welcomed cooperation among East African countries in developing the region’s petroleum sector.
The President said Uganda will participate in the development of a larger refinery in Tanga, Tanzania, as part of regional efforts to strengthen petroleum security.
“I am happy that Her Excellency Samia Suluhu has sent a delegation, so we are working together with East Africa to develop our petroleum,” Museveni remarked.
Environment conservation
President Museveni cautioned against encroachment on wetlands and other water bodies, stressing the importance of protecting the environment as the country develops.
He also raised concern about the proximity of a garbage dumping site to the petroleum storage facility, describing the situation as dangerous and calling for the site to be relocated.
“We must find alternative means of dealing with waste. One of the ways is through incineration, which is also a source of electricity,” he ordered.
UNOC ready to commence works
The Chairman of the UNOC Board of Directors, Mr Mathias Katamba, described the Kampala Storage Terminal as a major milestone in Uganda’s petroleum sector and said it would contribute to positioning the country as a regional hub for petroleum products.
Katamba said UNOC is ready to commence implementation of the project, having secured the required government and building permits from the relevant local authorities, as well as a petroleum facility construction permit from the Ministry of Energy and Mineral Development.
Detailed engineering is expected to be completed by March 2027, while commissioning of the terminal is scheduled within 24 months of the contract effective date, around September 2028.
Dr. Monica Musenero, the Minister of Energy & Mineral Development, said a 2017 master plan undertaken by the energy ministry recommended the development of this storage facility to serve as the delivery point for the Eldoret-Kampala petroleum products pipeline extension, off-take point for the Kampala-Kigali petroleum products pipeline extension and the delivery point for the Hoima-Buloba petroleum product pipeline from the planned Uganda Refinery.
Irene Batebe, Energy Ministry Permanent Secretary, described how limited in-country storage has left the nation exposed to external shocks, whether from disruptions along import corridors, global supply constraints, or sudden price spikes.
“Adequate strategic reserves are essential to keep industry running, transport moving, and households supplied even when external supply chains are interrupted.
The Kampala Storage Terminal will strengthen Uganda’s ability to hold meaningful volumes of petroleum products, improve resilience against prolonged supply disruptions, and contribute to more stable pump prices for consumers,” Batebe said.
“Once commissioned, the terminal will significantly expand our national storage capacity beyond the existing Jinja terminal and serve as a strategic reserve facility, a hospitality terminal for oil marketing companies, and a central distribution hub for Kampala, the central region and other parts of the country,” she added.
Fact file
The project was conceptualised in 2008 by the Ministry of Energy and Mineral Development but its development mandate was handed to the Uganda National Oil Company (UNOC) in 2018.
The project that will cost $310m (about sh1.22 trillion) is expected to be completed in a 24-month period.
Uganda consumes up to 240 million litres of fuel monthly, according to Ministry of Energy officials.
Currently, the total petroleum product storage capacity held by both the Government and the private sector is estimated at 159.7 million litres.
The storage is predominantly concentrated in the central part of the country, including Jinja Storage Terminal with 30 million litres, Mahathi Infrastructure and oil marketing companies with 70 million and 59.7 million litres of fuel storage, respectively.