Parliament-Uganda is planning to set up an ammonia fertiliser plant thanks to the presence of oil and gas in the country.
The Minister for finance and economic development Maria Kiwanuka made the revelation as she read the Budget speech for financial year 2014/15 in which she also announced a shs1.6 trillion allocation for the energy sector.
The ammonia fertiliser plant will be the first of its kind in the region.
Ms Kiwanuka said when the oil refinery is finally constructed; some of the oil by products will be used in the production of the ammonia fertilisers.
“Uganda is 1,000kms from Mombasa and has 33 million people who are already using refined products,
“We are also going to ensure that the bi products (from oil) are used as fertilisers which we will be produced in the ammonia fertiliser plant that will be set up and it will be the first in the region,” she said.
Ammonia is used as fertilisers either as salts or as solutions. When applied to soil, it helps provide increased yields of crops such as maize and wheat.
Uganda discovered commercial quantities of oil in 2006 and the current reserves are estimated at 3.5 billion barrels with 1.5 billion barrels being recoverable.
It is expected at that at peak production, Uganda will be producing 120,000 barrel of oil per day but government insisted on refining part of the oil (60,000 barrels max) domestically and export the rest as crude.
Government has so far been involved ion compensations to clear the 28 square kilometres so land that were curved out to host the refinery—a total of 7,018 residents in 13 villages are affected
At the close of the last financial year, land acquisition has progressed with the compensation for 50 per cent of project-affected persons.
The process for selection of the lead investor for the oil refinery has also reached advanced stages following submission of proposals by four of the six shortlisted international firms.
In her speech, the minister echoed to the public that the refinery will be developed as a Public-Private Partnership (PPP) with the selected Lead Investor holding a 60 per cent shareholding; and government and participating East African Community partners states holding up to 40 per cent of the oil refinery shares.
“Over the next year, the engineering design of the oil refinery will be completed to pave way for construction to begin,” she said.
In an interview last year, the Ministry of Energy Permanent Secretary, Mr Kabagambe Kaliisa, told this newspaper that 2015 was earmarked for the start of the refinery construction and 2017 is projected to see the first phase (30,000bpd) of the refinery project to be done.