According to an analyst with GlobalData, there are plans to develop two east African refineries in the pipeline. This is following a forecasted rise in demand for refined products that has the potential to strengthen relationships between some of the region’s countries.
Industry forecasts state that demand for aggregated refined products in east Africa is expected to increase from its current estimated level of 75 000 bpd to 150 000 bpd by 2025. This has apparently lead to the plans for a new refinery in Uganda and the upgrade of an existing refinery in Kenya.
In Uganda, a framework agreement for construction has been negotiated between Tullow Oil of Ireland, Total of France and China National Offshore Oil Corporation (CNOOC). The facility will have a processing capacity of 30 000 bpd and will be located in Hoima.
‘The plans to position this new refinery near the fields where the oil will be sourced means that it will be in a prime location to serve not only the refined product needs of Uganda, but also those of Congo, Rwanda and Burundi,’ said Jeffrey Kerr, GlobalData’s Managing Analyst covering downstream oil and gas.
The Kenya Petroleum Refinery Limited (KPRL) plant has fallen to sustained neglect and is in need of upgrade. KPRL and India’s Essar Petroleum jointly own it. The owners are negotiating a US$ 1.2 billion financing agreement which will be used to upgrade the hydrotreating units and increase atmospheric distillation to 70 000 bpd, among other improvements.
Pipeline: Key to success?
The Kenya, Uganda and Rwanda governments have signed a Memorandum of Understanding (MoU) to aid the success of these projects. The MoU will provide funding for a pair of pipelines that could transport crude oil and refined products through their countries.
The proposed pipeline will originate in South Sudan and pass through Uganda, Rwanda and Kenya en route to Lamu. It will provide passage for Uganda to transport its crude oil to market, while the proposed refined products pipeline would begin in Mombasa and follow a similar route, further linking Kenya, Rwanda and Uganda together.
‘Following the latest crude oil discoveries in the region, there is a need to build infrastructure here such as refineries, terminals, pipelines and ports, and this seems to be bringing the countries of east Africa closer together and allowing them to work in collaboration to discuss new solutions for fulfilling the increasing demand.’
Adapted from press release by Claira Lloyd.
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/31072013/east_africa_refinery_builds519/