Govt signs agreement for development of oil refinery in Kabaale

OIL AND GAS

KAMPALA - The Government has, through the ministry of energy and mineral development together with the Uganda National Oil Company, today entered into the Project Framework Agreement (PFA) with the Albertine Graben Refinery Consortium (AGRC) for the development of the oil refinery.

According to a statement signed by the ministry's permanent secretary, Robert Kasande, the Government selected the consortium to negotiate the agreement for the development of the oil refinery.

"The Government entry into the PFA with the Albertine Graben Refinery Consortium for the purposes of developing, designing, financing, construction, operation and maintenance of the oil refinery in Hoima district, marks a major milestone in the country's oil and gas sector," Kasande wrote.

The signing of the PFA will lead to the commencement of pre-final investment decision activities such as engineering and design, project capital and investment costs estimations, environmental and social impact assessments among others.

Under the PFA, the consortium will be responsible for funding the pre-final investment decision activities and will proceed thereafter to construct and operate the refinery. The refinery is going to be developed as a commercially viable venture with a regional market focus.

"It will supply its products that will include kerosene, petrol, diesel and heavy fuel oils, among others to the Ugandan and regional markets. It is believed that this will not only improve access to these products, but also create employment and contribute to national development. The refinery is planned to have a 60,000 barrels per day refining capacity and will rely on crude oil from Uganda's oil fields under development," reads the statement.

The consortium will be required to raise the required finances for the project and deliver a cost-effective, technologically-sound and environmentally-compliant refinery design that creates jobs and skills development for Ugandans.

This milestone is a land mark in the commercialisation of the country's petroleum resources estimated at 6.5 billion barrels.