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Uganda approves FEED, EPC contractor for proposed refinery

Date: 13/03/2019

Source: Oil and Gas Journal

The government of Uganda has approved a plan by the Albertine Graben Refinery Consortium (AGRC)—comprised of YAATRA Africa LLC, Mauritius; Lionworks Group Ltd.; Mauritius; Baker Hughes General Electric’s (BHGE) Italian subsidiary Nuovo Pignone International SRL; and Saipem SPA of Italy—to have Saipem move forward with both front-end engineering design (FEED) as well as engineering, procurement, and construction (EPC) of a grassroots 60,000-b/d refinery in Kabaale, in western Uganda’s Hoima district (OGJ Online, Apr. 12, 2018).

With the government’s Mar. 12 formal approval now in place, AGRC plans to advance FEED activities to ensure completion of all preliminary activities necessary for a final investment decision (FID) on the project, which is due by yearend 2020, Saipem said.

Approval of Saipem as FEED and EPC contractor follows AGRC’s initial $68-million FEED contract award to the service provider in August 2018 following the consortium’s original project framework agreement (PFA) for the proposed refinery signed with Uganda’s Ministry of Energy & Mineral Development and state-owned Uganda National Oil Co. earlier that year (OGJ Online, Aug. 3, 2018).

Under the 2018 PFA, the BHGE-led AGRC will be responsible for funding all pre-FID activities for the project as well as construction and operation of the refinery, which is to be developed as a commercially viable venture with a regional market focus.

Previously slated for startup in 2020, the refinery project aims to create greater independence for the domestic Ugandan market by reducing imports of oil and refined products from other countries, as well as ensure a hub for refined products for the East African market.

Once completed, the refinery—which is to be equipped with the latest processing technologies and environmental controls and designed to process crude from Uganda’s oil fields currently under development—will produce kerosine, gasoline, diesel, heavy fuel oils, and other products for supply to the Ugandan and regional markets.

Overall cost of the proposed refinery project is estimated at about $3-4 billion, Irene Muloni, Uganda’s minister of energy, said last year.

While AGRC has yet to officially confirm a revised timeline for anticipated commissioning of the refinery, local media outlets have reported that, if approved, construction on the project would be completed by 2023.

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