The final investment decision (FID) for Uganda’s planned 60,000 b/d crude oil refinery could come as early as March this year, the country’s Petroleum Authority revealed in an update on Wednesday.
This development means the implementing partners could break ground on construction of Uganda’s first refinery in Hoima City, where the land for the project has already been secured.
Energy Minister Ruth Nankabirwa said the government has set the stage in ready mode, having completed two key agreements to facilitate the looming FID.
During a visit to neighbouring Tanzania, Nankabirwa said: “The refinery works will soon begin because the implementation agreement and the crude suppliers’ agreement have been completed.”
The crude supply agreement gives the planned refinery first access to crude from both the Tilenga and Kingfisher fields once operational. The implementation agreement, formalised last March between Uganda’s national oil company Unocand Alpha MBM, sets out obligations for all parties and execution timelines.
Dubai‑based Alpha MBM last year agreed a financing model with Unoc to fund the $4.5bn project on a 60:40 basis, with Unoc receiving the smaller equity. A tolling agreement will also see Unoc supplying feedstock to the plant for a fee.
Supplies are expected to be handled through the East African Crude Oil Pipeline (Eacop), which has its first pump station in Hoima and is currently at an advanced stage of completion.
Arguably the world’s longest heated crude pipeline, Eacop is designed to transport up to 216,000 b/d from Uganda’s oil fields to Tanzania’s export terminal on the Indian Ocean. The $5bn project, which achieved FID in 2022, is co‑funded by TotalEnergies and Cnooc, operators of Uganda’s Albertine Basin.
Nankabirwa is in Tanzania to assess infrastructure readiness from the export side ahead of the mid‑year first‑oil commissioning target.
“I visited one of the final construction sites where critical line pipe welding is underway on the last 100km stretch of the 1,443km East African crude oil pipeline, from Pump Station 1 in Hoima to the Tanga Terminal in Tanzania,” she said on X.
“This milestone marks the near completion of the physical pipeline that will connect Uganda’s oil resources to global markets.”
The minister said last year that the government is “keen on ensuring all project timelines are met,” adding that the pipeline will enable Uganda to earn significant revenues for national development.
Ugandan oil industry analyst Kitubi Martin recently noted on X that “as the completion of Eacop draws closer, the government and its partners are turning their focus to the development of the refinery project.”
Approved by Kampala in mid‑2019, the refinery will be configured as a residual fluid catalytic cracker, skewed towards producing petrol and diesel. Government officials have confirmed that the FEED phase has been completed, though production is not expected until the 2029/2030 financial year.
Sources familiar with the negotiations say the refinery’s shareholders’ agreement will be concluded on 26 March, when the FID is slated to be formally announced.