Uganda has started the search for a consultant to undertake a study that will guide the creation of a well-managed transportation system of bulky petroleum products over Lake Victoria amid a poor road network that cannot adequately support the industry.
The government says petroleum products continues to grow by at least 10 per cent, with the most amount of this coming via road through the Kenyan port of Mombasa. With Uganda looking to produce at least 30,000 barrels of refined petroleum products per day, the plans to set up a petroleum transportation system are seen as a move for the country to transport its oil products to regional markets.
According to the ministry of Energy, the study will seek “to evaluate factors constraining bulky transportation of products over Lake Victoria and recommend interventions required to unlock the potential.”
The study might also recommend ways for Uganda to establish an oil jetty. The ministry of Energy notes that the study will also “Establish infrastructure requirements at best sited ports for handling bulky petroleum products in Tanzania, Uganda and Kenya.” The study should establish the kind of network that can support a transport system suitable for at least 20 years. The short list for the consultants is to be published on February 15.
A petroleum transportation system offers Uganda an alternative route from its inefficient road network, which, in its current state, is not able to support the oil industry the country seeks to create.
The idea to put up a petroleum transportation system over Lake Victoria is not new. In June 2015, President Yoweri Museveni met top officials from Mahathi Infra Services Private Ltd, who expressed interest in creating a transport system for petroleum products over Lake Victoria. Nothing concrete appeared to have come out of those discussions.
An investment firm, eleQtra, plans to improve marine cargo transportation over Lake Victoria by bringing in modern vessels. According to eleQtra, the Lake Victoria Marine Transport project consists of two phases: the first one entails the development and financing of a small fleet of purpose-built roll on/roll off vessels that will offer freight services to customers in the region.
The second phase will include improvements to port infrastructure throughout Lake Victoria. The first phase is estimated to cost between $25 million to $30 million. The governments of Uganda and Tanzania are financing the project. Uganda has noted in an earlier budget framework paper that it is keen to develop ports around Lake Victoria in order to open up the southern route to Tanzania.
The European Union is already supporting marine transport on Lake Victoria by rehabilitating three to six ports between Kenya, Tanzania and Uganda on Lake Victoria to a tune of 122.6 million Euros. Much of the work will go towards improving the capacity of the ports to handle larger volumes.
Uganda’s plans to put a petroleum transport system comes at the same time as neighbouring Kenya is planning on a similar venture. Kenya is currently looking for contractors to put up an oil jetty at the port of Kisumu. The jetty is expected to ease the transportation of petroleum products from Kenya across the region.
Uganda has so far discovered 6.5 billion barrels of oil, with at least 1.4 billion of that amount thought to be recoverable. The country is still scouting for an investor it can partner with to put an oil refinery that can initially refine 30,000 barrels of oil per day.
jeff@observer.ug