NewsOil & gas

Uganda, U.S. Consortium Sign Landmark Oil Refinery Agreement

Government through the Energy Ministry on Tuesday marked yet another milestone in the country’s oil and gas sector, by signing the Project Framework Agreement (PFA) for construction of the Oil Refinery in Hoima District.

The PFA was signed by the Energy Ministry and the Albertine Graben Refinery Consortium (AGRC) which was selected in June last year to negotiate the agreement.

Uganda entered the agreement with AGRC to develop, design, finance, construct, operate and maintain of the oil refinery in Hoima district.

The signing of the PFA will lead to the commencement of pre-Final Investment Decision (FID) activities such as Front-End Engineering and Design (FEED), Project Capital and Investment Costs Estimations (PCE), Environmental and Social Impact Assessments (ESIA), among others.

President Yoweri Museveni who witnessed the signing at State House Entebbe, expressed commitment to continue a sustainable and desirable development of an oil and gas industry in the country in partnership with diverse group of private sector partners for the benefit of Uganda and the region.

The Parties to the Agreement are: – (i) Government of the Republic of Uganda (Acting through the Ministry of Energy and Mineral Development), The Uganda National Oil Company Limited, YAATRA Africa (Mauritius), Lionworks Group Limited (Mauritius), Nuovo Pignone International SRL – A General Electric Company (Italy) and SAIPEM SPA (Italy).

Under the PFA, AGRC will be responsible for funding the pre-FID activities listed above and will proceed thereafter to construct and operate the refinery.

The refinery will be developed as a commercially viable venture with a regional market focus.

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It will supply its products that will include kerosene, petrol, diesel, 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 as well 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.

During the term of the Agreement, the Albertine Graben Refinery Consortium (AGRC) shall establish a profitable and commercially viable refinery that delivers refined products to the market.

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.

The Project will be implemented by a Special Purpose Company, the Refinery Company, to be incorporated by the Private investors and the Uganda Refinery Holding Company, a subsidiary of the Uganda National Oil Company.

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