Uganda Pushes Oil-Refinery Start to 2022 as Project Plan Delayed

(Bloomberg) -- Uganda’s planned oil refinery, due to process the country’s first crude output, may start two years behind schedule after project studies were delayed.

The front-end engineering design, or FEED, initially due for completion last year, has only just begun, Energy Minister Irene Muloni said Wednesday. The delay to startup -- now seen in 2022 -- will set back Uganda’s plans to reduce fuel imports and start exporting to neighbors.

“FEED is just beginning and it will impact on the completion of the refinery,” Muloni said in an interview in the capital, Kampala. “For the refinery there is definitely a slippage.”

A group led by General Electric Co. is contracted to build the 60,000 barrel-a-day plant in the Hoima district of western Uganda. It will take oil from fields being developed by Total SA, Cnooc Ltd. and Tullow Oil Plc -- due to start flowing in 2020. Plans have also been submitted for a 900-mile crude-export pipeline via Tanzania, which will be completed before the refinery, Muloni said.

Other partners in the GE-led group -- which will own a 60 percent stake in the refinery -- are Yaatra Ventures LLC, Italy’s Saipem SpA and Kenya-based private-equity firm FireWorks Capital. Uganda has said Total will also invest, as will the Tanzanian and Kenyan governments.

Muloni insisted Uganda is still targeting the start of oil production in 2020, even though Cnooc has suggested output may begin a year later because of delays to final investment decisions.

To contact the reporter on this story: Fred Ojambo in Kampala at fojambo@bloomberg.net. To contact the editors responsible for this story: Paul Richardson at pmrichardson@bloomberg.net Amanda Jordan, Helen Robertson.