Kenya, Rwanda to request Uganda refinery shares

Uganda’s planned refinery will be built in modular form starting with 30,000 barrels. PHOTO | FILE 

By KENNEDY SENELWA

In Summary

• Last year, Uganda invited Kenya, Rwanda, Tanzania and Burundi — as members states of East African Community — to subscribe to shares in the plant.

Kenya and Rwanda will present their requests for share participation in Uganda’s 60,000 barrels-a-year crude oil refinery, which should be operational by 2018.

A consortium led by RT Global Resources of Russia has been selected as the preferred bidder to be lead investor for building the refinery, which will produce petroleum products for domestic consumption and export.

Uganda has discovered 6.5 billion barrels of oil and last year the government invited Kenya, Rwanda, Tanzania and Burundi — as members states of East African Community — to subscribe to shares in the plant. The refinery will be built in modular form starting with 30,000 barrels before capacity is increased.

“The other four EAC partner states have shown interest in taking up some of the public shares. Tanzania and Burundi are still reviewing the studies related to the project,” said Gloria Sebikari, senior communications officer in the Energy Ministry.

She said Kenya and Rwanda, under the Northern Corridor Integration Projects (NCIP) are expected to formalise their interest at the next Summit to be held in March.

READ: Kenya acquires 2.5 pc stake in Uganda refinery

ALSO READ: Oil production still way off for Uganda, 2018 target now unlikely

The Summit was scheduled for mid-February in Kigali, Rwanda, but was postponed to early March. The initial two-day session of experts and other senior government officials is scheduled to start on March 4.

It will be followed by ministerial deliberations on March 6 and the Heads of State Summit on March 7. Leaders from Kenya, Uganda, Rwanda and South Sudan will look for ways to fast track NCIP projects.

At the Summit, Kenya is expected to commit $61 million to acquire a 2.5 per cent stake in Uganda’s crude oil refinery, which will be built in Hoima district, bordering the Democratic Republic of Congo.

Kenya’s Energy Principal Secretary Joseph Njoroge said in January that the country had made a decision to consider Uganda’s offer for shares in the refinery.

“In line with the spirit of regional co-operation we committed to support each other in key infrastructure projects, so we shall support the Ugandan one. We shall take up a minimal 2.5 per cent stake in the refinery project,” said Mr Njoroge.

A refined fuel pipeline will be constructed from Eldoret in western Kenya to Kampala in Uganda. The reverse flow pipeline will have the capacity to pump products either to Kampala or Eldoret depending on demand patterns.

The first phase of the refinery is expected to start operating in 2018. Tullow Oil Plc, China National Offshore Oil Corporation and Total of France are expected to start oil production in the Albertine basin in western Uganda in 2018.

Tullow, Total and CNOOC, who are licensed in Albertine basin, have signed an MoU with Uganda for commercialisation of discovered resources and development of the refinery. It includes use of crude to generate electricity and export of the raw fossil fuel.