Uganda Awards Refinery Deal to GE After Earlier Contracts Dumped

KAMPALA (Capital Markets in Africa) – Uganda awarded the contract to build its first refinery to General Electric Co. and partners, sealing a deal for the 60,000-barrel-a-day plant after previous agreements collapsed.

The Albertine Graben Refinery Consortium, led by Boston-based GE, will develop the refinery in Hoima district, Ugandan President Yoweri Museveni said on his Twitter account after the accord was signed Tuesday. It’s a breakthrough for the long-planned project, which will allow the country to process its own oil once crude production starts at the end of the decade.

The deal “ensures development, design, financing, construction, operation and maintenance of the facility,” Museveni said, without specifying the stakes to be held by the consortium and the government. “Western companies are now waking up to the realization of Africa’s potential.”

Yaatra Ventures LLC, Intracontinent Asset Holdings Ltd. and Italy’s Saipem SpA are the other partners in the group that will build the plant, estimated by the government to cost about $4 billion. The facility, which will initially process 30,000 barrels a day before an upgrade to double capacity, will refine crude from Ugandan discoveries holding as much as 1.7 billion recoverable barrels.

The contract for the refinery was first awarded to RT Global Resources, a Russian company, in 2015. That deal was suspended in 2016 and the government subsequently offered the project to a group led by SK Engineering & Construction Co. of South Korea. That agreement was also rescinded.

Source: Bloomberg Business News