As government prepares for the construction of an oil refinery in Hoima district, plans to build a petroleum distribution terminal at Buloba, outside Kampala, have been mooted.
Irene Batebe, a petroleum officer in charge of refining at the Petroleum Exploration and Production department (PEDP), told journalists recently that a pipeline from the refinery would deliver oil products at Buloba, on Mityana road, from where they would be redistributed to various commercial units in the country.
It is believed that this project will come with an infrastructure explosion at Buloba and surrounding areas, thus increasing the value of the land and other property. Batebe told journalists that Buloba was selected because of its proximity to Kampala, where a substantial amount of the oil is expected to be consumed.
Batebe further said that there was need to have distribution centres in major regional towns such as Mbarara, Gulu, Mbale or Jinja.
“A feasibility study on distribution and storage facilities for petroleum products from the refinery to respective demand [centres] is being conducted,” she said, adding that following the completion of this study, government would source for investors to undertake the pipeline construction.
Government plans to commission the first phase of the oil refinery in 2016, with capacity to refine 30,000 barrels per day, before upgrading to 60,000 barrels per day in 2018, 120,000 in 2022 and eventually 180,000 barrels per day. Plans for the refinery at Kabaale, Hoima district, have sparked a frenzy of business activity, with offshoot industries dealing in chemical products expected to set up.
An aerodrome to fly in large equipment as well as expatriates will also be built. However, no infrastructure will be as visible as the pipelines crisscrossing the region, feeding crude into the refinery and taking out refined petroleum products to key commercial hubs.
There will be at least two pipelines – the northern and the southern - to evacuate crude from the fields to the refinery. According to the ministry of Energy and Mineral Development sector performance report 2011/2012, to construct the two internal crude pipelines, $185.4 million (approximately Shs 456 billion) is required.
The ministry says this project will be funded on a public-private Partnership arrangement. The northern pipeline, the report notes, is expected to be 96km long with a 16 inch diameter. It is to evacuate crude oil from the northern oil fields in the Albertine graben, mainly from Jobi in Nwoya district, Kasemene, Kigogole and other oil fields in Buliisa district, on to the refinery.
This pipeline is expected to be the busier of the two since most of the oil discoveries are located in the northern hub. According to the report, the northern crude pipeline is estimated to cost $132m (approximately Shs 324bn).
The northern pipeline is expected to run from the northern end of the Albertine graben in Nwoya, through Murchison Falls national park to Buliisa district, parts of Hoima district, and finally to the central crude hub at the proposed oil refinery. The southern pipeline, on the other hand, will evacuate crude oil from the southern oil fields in the southern part of the Albertine graben to the refinery.
This particular pipeline is estimated to be 46km long with a pipeline diameter of 17.7 inches. The southern pipeline is estimated to cost $53.4m (approximately Shs 131bn). This pipeline will evacuate oil from oil fields like Turaco, King Fisher and others in the southern end of the graben.
The crude pipelines will be constantly heated to enable crude to flow, since Uganda’s waxy crude solidifies at room temperature. According to the report, a study to evaluate the development of crude pipelines and storage facilities for crude oil and gas in Uganda found it feasible to develop only two pipelines. Undertaken by Fichtner Mei, a German company, the study was completed in February 2011.
The Shs 500bn needed to develop the crude pipelines includes the cost of compensating owners of the land where the pipelines are expected to pass, the report states.
It was further revealed that a feasibility study would assess the distribution of refined petroleum products from the refinery to different parts of Uganda, as well as regional markets such as Rwanda. The study, which commenced in February 2012, is expected to be completed by the end of 2013.