Uganda narrows bidders for grassroots refinery

Uganda’s government has selected two of the four proposals from international companies bidding to build and construct the country’s first refinery and related infrastructure in the Lake Albert region of Buseruka Subcounty, Hoima District, Uganda (OGJ Online, June 4, 2014; Dec. 2, 2013; Feb. 2, 2010).

The two bidders that have been invited to progress to the next stage of the tender process are the consortia led by South Korea’s SK Group and Russia’s RT Global Resources, Uganda’s Ministry of Energy and Mineral Development (MEMD) announced on June 24.

Following negotiations with the two bidders, the Ugandan government will issue a request from the consortia for their best and final offers, which must be submitted by the end of August 2014, according to F.A. Kabagambe-Kaliisa, permanent secretary of MEMD.

“Government will then negotiate the principal project agreements with the highest-scoring preferred bidder and, once executed, [advance] the development of the project,” the secretary added.

The proposed 60,000-b/d refinery, which will be developed in two, 30,000-b/d phases, will include on-site crude oil and product storage as well as a 205-km product pipeline to a distribution terminal near Kampala (OGJ Online, June 4, 2014).

The Ugandan government will hold 40% equity in the project, while the winning bidder, as lead investor and operator, will hold the remaining 60%.

The refinery will be designed to process Uganda’s waxy crude oil (23-33° API, 0.16 wt% sulfur) produced from the Albertine basin to serve petroleum product markets in Uganda, Congo (former Zaire), South Sudan, Rwanda, Burundi, Kenya, and Tanzania, according to MEMD.

Financial close on the project is scheduled for second-half 2015, with the first phase of the refinery due to be commissioned sometime in 2017-18, MEMD said (OGJ Online, June 4, 2014).

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