Commodities

Refinery tender enters third phase, four firms submit bids

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Workers and officials tour the drilling sites in the Albertine Graben. Uganda discovered oil in the Albertine Graben basin in 2006. FILE PHOTO 

By FREDERIC MUSISI

Posted  Thursday, June 5  2014 at  01:00

In Summary

Capacity. Facility expected to produce 6,000 barrels per day

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KAMPALA

Four firms, out of the six initially shortlisted for the second round of investor bidding, have submitted detailed proposals to government to lead the construction of the 60,000 barrels-per-day (bpd) Greenfield refinery.

The lead investor will also construct the related downstream infrastructures, expected to start in the first quarter of 2015.

The four include the China Petroleum Pipeline Bureau (CPPB) led consortium, Marubeni Corporation from Japan, the RT – Global Resources (Russia) led consortium and SK – KDB Global Investment Partnership Equity Fund, from South Korea.

The refinery project manager, Mr Robert Kasande, quoted in a statement issued by government’s Petroleum Exploration and Production Department (PEPD), said the “evaluation criteria will include, but not be limited to, the overall technical experience and financial capacity” and the development, financial and commercial plans submitted by the bidders.

Two other consortia; United Arab Emirates’ PETROFAC pulled out of the deal indicating that they were opting to concentrate on their core business in Engineering, Procurement and Construction (EPC) for the upstream petroleum sub-sector” while Switzerland’s VITOL SA, cited “internal reasons” among the consortium members.

The latest development, the third phase, comes against a backdrop of the closed door bidder’s conference held in Kampala in March this year, organised by Taylor DeJongh, the US based transaction adviser that the government hired in 2012 to help in the identification of the suitable investor.

Officials from the bidding company reportedly also met executives from Frances’ Total E&P, China’s Cnooc and UK’s Tullow Oil PLC; the licenced joint venture companies undertaking the oil-basin development projects which are expected to feed the refinery with crude oil.

“One of the government’s objectives is to select an investor that will develop a refinery to convert Uganda’s waxy crude oil into the desired petroleum products that meet set standards,”
Robert Kasande, refinery project manager

musisif@ug.nationmedia.com