Uganda to invest $1bn in oil and gas infrastructure

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UGANDA is set to invest more than $1bn in the oil and gas industry, senior energy ministry officials have said.

According to  Irene Muloni, the Minister of Energy and Mineral Development, the outlay for this year is part of the close to $20bn that the government expects over the next three years as the joint venture oil company partners step up activities to commercialise Uganda’s petroleum resources which were discovered over a decade ago.

The development of the upstream projects are being taken forward by the three joint venture partners, CNOOC Uganda Ltd, Total E&P Uganda and Tullow Uganda Operations Pty Ltd.

Pick-up in activity

Muloni said that the government expects a pick-up in activity in the sector that involves designs of key production infrastructure such as the East African Crude Oil Pipeline and the two central processing facilities.

The oil companies need to develop infrastructure to produce the oil. These include drilling and completing more than 400 wells, setting up two central processing facilities, laying of over 200km of in-field flow lines, laying approximately 150km of feeder pipelines, construction of base camps and minor access roads, among others.

The Tilenga project which covers Buliisa and Nwoya districts and the Kingfisher project which covers Hoima and Kikuube districts—both estimated to cost about $8bn, are also part of the projects which will be looked into. The project will have a processing facility with capacity of up to 190,000 barrels of oil per day and the Kingfisher project, 40,000 barrels per day. These processing facilities will feed into the refinery and the 1,445km crude oil pipeline.

Ugands’s first oil

Ugands’s first oil was scheduled for 2020 but the joint venture oil companies failed to submit their final investment decisions in time. Muloni said the government had expected the key decisions to be made latest end of 2017 or in the first quarter of 2018.

‘Unfortunately, it has not happened and 2018 has come to an end. That means Uganda’s first oil shifts,’ said Muloni.

Muloni said the government has given the refinery consortium a maximum of two years to reach a FID after which they will embark on construction of the refinery. It is expected to be ready in 2023.

 

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