Consortium lets FEED contract for Uganda’s first refinery

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—has let a contract to Saipem to deliver front-end engineering design for a grassroots 60,000-b/d refinery in Kabaale, in western Uganda’s Hoima district.

Valued at about $68 million, the FEED phase—which will use Ugandan vendors and personnel—will last 17 months, with a possible extension for the engineering, procurement, and construction phase to follow in the future, Saipem said.

The FEED contract follows AGRC’s project framework agreement (PFA) for the refinery signed earlier this year with the Ugandan government through the Ministry of Energy & Mineral Development and state-owned Uganda National Oil Co. (OGJ Online, Apr. 12, 2018).

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, Saipem said.

Under the April PFA, the BHGE-led AGRC will be responsible for funding all pre-final investment decision 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.

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 in April.

Contact Robert Brelsford at [email protected].