Uganda and Alpha MBM to develop 60,000 b/d Kabaale refinery
- Planned 60,000 barrels-per-day RFCC refinery to be built at Kabaale in Hoima District.
- Alpha MBM Investments (UAE) has been named lead partner and will partner with the Uganda National Oil Company (UNOC).
- Project scope includes a 211 km multi-product pipeline to a Namwabula storage terminal, plus the Mbegu water intake and pipeline.
- Key commercial negotiations began 16 Jan 2024 and were expected to conclude within three months; project funding targeted at a 60:40 debt-to-equity ratio and UNOC may hold up to 40% via Uganda Refinery Holding Company.
Project scope
The Uganda Refinery Project foresees a 60,000 barrels-per-day refinery sited at Kabaale, Buseruka Sub-County, Hoima District. The scope includes a 211 km multi-products pipeline to a storage terminal at Namwabula, Mpigi District, the Mbegu water intake and associated water pipeline, plus the Namwabula products storage terminal.
Technical background and approvals
A 2019 final refinery configuration study determined the refinery as a Residue Fluid Catalytic Cracker (RFCC) type. Front-End Engineering Design (FEED) was completed in 2021 and subsequently approved by Cabinet and the Petroleum Authority of Uganda (PAU).
Partners, investment and schedule
Alpha MBM Investments LLC, an Emirati investment firm led by His Highness Sheikh Mohammed bin Maktoum bin Juma Al Maktoum, is the lead partner and will partner with UNOC. A Memorandum of Understanding was signed on 22 December 2023. Negotiations on key commercial agreements commenced on 16 January 2024 and were expected to conclude within three months; development works will begin once agreements are concluded. The government expects at least US$4 billion in investment for the project.
Commercial agreements and financing
At least three primary commercial agreements are planned before Final Investment Decision: a Host Government Agreement, a Crude Suppliers Agreement and a Shareholders’ Agreement, with an Offtakers/Product Sales Agreement to be concluded as required by lenders. Crude supply is to cover 60,000 b/d and the crude owners listed are the Government of Uganda and UNOC, TotalEnergies E&P Uganda and CNOOC Uganda Limited. The Uganda Refinery Holding Company (a UNOC subsidiary) may hold up to 40% in the refinery company. The project targets a 60:40 debt-to-equity financing structure. Host Government and Shareholders’ Agreements will set out security, land, national content, HSE, cash calls, defaults and voting rights, while Offtakers arrangements will be driven by financiers’ requirements.
Source: unoc.co.ug
