Uganda has floated an international tender for consultancy services on the logistics for building a $2 billion refinery in Kabaale, Hoima district, some 420 kilometres south- west of Kampala.

Officials at the Petroleum Exploration and Production Department (PEPD) at the Ministry of Energy said they are also looking for a lead investor for the refinery, which will have an initial capacity of 60,000 barrels of crude oil per day.

“The search for a lead investor will start next month through international bidding,” said Ernest Rubondo, the commissioner in charge of PEPD. The refinery will be operated under a public-private partnership.

The Ministry of Energy is acquiring 29 square kilometres of land from local communities as part of the preparatory phase for the refinery.

The successful consultant will conduct a route survey from the Port of Mombasa in Kenya to Kabaale, to assess limitations for transport and recommend a specific location for the refinery and its boundaries.

“The consultant will also advise on shipments expected during construction and overall operation of the refinery,” said Kabagambe Kaliisa, the Permanent Secretary at the Ministry of Energy.

Mr Kaliisa said interested consultants are required to obtain bid documents after paying a non-refundable fee of Ush100,000 ($40) and submit them by June 21.

Notice of the best bidder will issued on July 11 and contract awarded by end of July in an exercise to be carried out under the Public Procurement and Disposal of Public Assets Act (PPDA) of 2003.

Uganda consumes about 550,000 cubic metres of refined fuel annually, 85 per cent of which is imported through Kenya and 15 per cent through Tanzania.

Local production and processing of crude oil has not started. Tullow Oil Plc jointly with Total of France and China National Offshore Oil Corporation are working on details of refining 200,000 barrels per day of crude oil from Lake Albert basin by 2015.

“The parties are discussing how the investment in the project to build a refinery near Lake Albert will be shared,” said Elly Karuhanga, chairman of the Uganda Chambers of Mines and Petroleum.

Major production from the Lake Albert Basin is expected approximately 36 months after the Uganda government approves a plan for the development.

“Options are being weighed to allow the sale of small volumes of crude from well testing to industry as well as some small scale power projects,” said George Cazenove who is in charge of Tullow’s media relations.

Uganda’s nascent oil and gas industry provides opportunities for both local and international investors to make money following the free-market policy adopted in the early 1990s.

“There are opportunities in the entire value chain from exploration, appraisal, development, production and value addition,” said Energy Minister Irene Muloni.

By Kennedy Senelwa and Esther Nakkazi