EA leaders agree to build oil refinery in western Uganda
Posted Thursday, April 10 2014 at 11:30
Weekend talks end with deals for pipeline, regional oil refinery in Hoima, western Uganda.
- Security concerns, energy challenges could derail plans, official warns.
- South Sudan, Ethiopia to join deal as it dovetails with Lamu Port project.
Kenya, Uganda and Rwanda have agreed on how to set up a regional oil refinery at Hoima in western Uganda, with a pipeline being one of the deals struck in Kigali on Sunday night.
President Uhuru Kenyatta and Uganda’s Yoweri Museveni joined their Rwandan counterpart Paul Kagame for talks on the sidelines of the ongoing commemoration of the 1994 genocide.
“The discussions centred on the oil refinery at Hoima,” the Presidential Strategic Communications Unit said in a statement to newsrooms Monday.
“The leaders also agreed on a joint construction of a crude oil pipeline from Hoima to Lamu in Kenya.”
The regional refinery and a crude oil pipeline linking Uganda’s oilfields to Kenya’s seaport of Lamu are among a raft of agreements that are covered in a trilateral pact signed last year.
The pact had, however, left room for the three states to decide whether to pool resources for the refinery and how to do so.
Uganda and Kenya have both confirmed commercial quantities of recently discovered oil. Both are currently sprucing up their mid-stream capacities.
Kenya closed down its ageing Changamwe-based oil refinery last year citing inefficiencies that made locally refined fuel more costly than imported finished products.
Kenya Petroleum Refineries Ltd’s assets were also unusable in refining the waxy oil discovered in both countries.
The Changamwe-based facility was built to handle murban crude oil from the Middle East. As a result, regional leaders have been mulling various pipeline and refinery options for when the oil finds come online.
Experts have, however, warned that a pipeline for waxy oil is likely to be a very expensive undertaking. Concerned states will not only have to invest in an inbuilt heating system to keep the crude flowing, but also to ensure its security from sabotage.
“With the numerous incidents of terrorism and the fact that we don’t have reliable electricity supply to guarantee 24-hour heating of the pipeline, we still have a long way to go,” a government official, who asked not to be identified, told the Business Daily.
South Sudan and Ethiopia are expected to join the initiative at a later stage as it progresses towards the Lamu Port.