Saipem Clears Hurdle for Uganda Refinery

A technical proposal developed by Saipem S.p.A. for a new refinery in Uganda has won formal approval from the Ugandan government, Saipem reported Wednesday.

Meeting at Saipem’s headquarters in Milan, Italy, a delegation led by Uganda’s minister of energy and mineral development agreed to a configuration for the 60,000-barrel per day (bpd) refinery proposed by the Albertine Graben Refinery Consortium (AGRC). The consortium – including YAATRA Africa, LionWorks Group and Baker Hughes, a GE company (BHGE) – had selected Saipem to execute the front end engineering design (FEED) and engineering, procurement and construction (EPC) phases of the project. The refinery would be built in Kabaale, located in the Hoima district of western Uganda.

The Ugandan government signed the refinery’s project framework agreement with AGRC and Saipem in April 2018. In statements attributed to YAATRA CEO Rajakumari Jandhyala, Saipem pointed out Tuesday that formal government approval of the proposal enables AGRC to start the next phase of developing the FEED: front-end engineering following the conceptual design study.

As this Bloomberg article from September 2018 notes, the project – tied to Uganda’s goal of reducing fuel imports and becoming a fuel supplier to neighboring countries – has encountered delays that could push back the start-up date by two years. The Petroleum Authority of Uganda website provides additional background information about the project.

In Tuesday’s announcement, Saipem stated that AGRC anticipates reaching final investment decision stage by the end of 2020.