Government to build Shs266 billion oil storage near Kampala city

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The oil exploration site at Ondyek in Panyimur where Total is drilling the oil

KAMPALA, UGANDA, Government is to construct a 60,000-cubic meter storage oil storage facility in the outskirts of Kampala ahead of oil production in 2020. According to Ms Josephine Wapakabulo, chief executive officer of the Uganda National Oil Co the facility may upgrade to 138,000 cubic meters if there’s demand.

In an email to Bloomberg, an online USA publication loaded on Wednesday, July 18, 2018, she said “Uganda, which plans to produce and refine its own oil, will require as much as $70 million (Shs266 billion) to construct a storage facility for refined products on the outskirts of the capital, Kampala.”

The East African country, which targets starting oil production from its western Lake Albert region in 2020, will seek a joint-venture partner for the project and will invite bids before the end of the year, she said. It already has storage for 30,000 million liters in the eastern town of Jinja.

The country signed in April a project framework agreement with the Albertine Graben Refinery Consortium, which includes a unit of General Electric Co., to develop a 60,000 barrels-per-day refinery. The facility in the oil-rich Hoima region will initially operate at half capacity before being upgraded.

The Ugandan government will have a 40 percent stake in the refinery. Of that shareholding, some percentage may be offered to neighboring Kenya and Tanzania, which “previously expressed interest,” she said. The government has in the past said the two were keen to take up 2.5 percent and 8 percent stakes respectively.

France’s Total SA, China’s Cnooc Ltd. and London-based Tullow Oil Plc are jointly developing Uganda’s 6.5 billion barrels of discovered oil resource, of which as much as 1.7 billion barrels are recoverable.

Uganda will also export its crude through a 1,445-kilometer (898-mile) pipeline worth $3 billion to a Tanzanian port. The host agreements with the three companies could be signed within three months, Robert Kasande, the permanent secretary in Uganda’s Energy Ministry, said by phone.

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