Uganda, Rwanda, Kenya and South Sudan agree on oil refinery

Last Updated 13 years ago by Kenya Engineer

Uganda, Rwanda, Kenya and South Sudan have agreed on the ownership of a new Uganda-based refinery, Uganda’s Minister of State for Energy Simon D’Ujanga said in Nairobi on Tuesday.

The four governments will own 40 percent of the refinery with the rest owned by the private sector, the minister confirmed in an interview with Xinhua.

“We have agreed on the ownership sharing to be 40 percent that is equally distributed among the governments,” said the minister.

“We have started engaging the private sector from across different parts of the world to become partners in the project,” the minister added.

The planned refinery will have capacity to process 60,000 barrels of oil per day, said the minister adding that the completion is expected by 2017.He however declined to give the estimated cost of the project.

“We cannot give the estimate costs now because that will jeopardize the tendering process.Let the private sector come and tell us competitively how much it will cost,” said the minister.

The refinery is meant to refine oil coming from Uganda, Kenya and South Sudan. Part of the oil will be fed to a proposed pipeline that will link South Sudan, Uganda and Kenya and terminate at the Kenya’s coastal town of Lamu, for export.

“Part of the oil will however be used locally as a raw material for petrochemicals industries like fertilizers and plastics among others”, said the minister.

If the oil production in either Uganda or Kenya starts before the refinery is completed, the minister said that the two countries will use the existing East Africa’s only oil refinery, the 50-year old Kenya Petroleum Refinery Limited (KPRL) co-owned by the state and India’s Essar Energy, located in the port city of Mombasa.

The refinery is however inefficient because of outdated technology and years of lack of servicing, which has resulted in oil companies in the region preferring to import refined fuel directly from the Middle East and Venezuela.

The joint refinery was agreed in June this year during a regional conference by the presidents of Kenya, Uganda and Rwanda in Ugandan capital Kampala.

Source: Xinhua