CNOOC gets licence to construct $4.8m natural gas facility 

Gas cylinders on sale. PHOTO/ FILE

What you need to know:

 All LPG used in Uganda is currently imported from Arab oil producing countries through the Organisation of the Petroleum Exporting Countries (OPEC).

Part of the product of Uganda's oil project is already showing signs of attracting returns after the government licensed China National Offshore Oil Corporation (CNOOC) to construct a $4.8m ( overShs183b) natural gas conversion facility for the Kingfisher oil well.

Speaking at the licence handover ceremony, the Minister of Energy and Mineral Development,  Ruth Nankabirwa, said this licence  will ensure that the by-product of fuel is used in manufacturing of Liquefied Petroleum Gas (LPG).

Ms Nankabirwa said in addition to oil resources, Uganda is also expecting gas occupying 500b cubic feet which will produce 20,000 tonnes of LPG per year  if all projects go well.

"This is going to be an advantage  because the global narrative is to shift from dirty sources of fuel to cleaner sources of fuel. When we go abroad to conferences, we always promise that Uganda will move away from biomass," Ms Nankabirwa said.

She said CNOOC fulfilled the requirements for this licence.So it is important that they are given this LPG licence, now that they are developing the Central Processing Facility (CPF) to go ahead and construct the gas conversion facility.

She explained that gas conversion is one of the operations in the Petroleum, Refining, Conversion, Transmission and Mainstream Storage Act of 2013.

Other than that, Ms Nankabirwa said with this agreement, Uganda will be saved from those items that she has been importing especially for the mining sector, which are very dangerous.

The Minister asserted, “In the mining sector, we have been importing ammonium nitrate which we need, so we expect to maximumly benefit from these new resources,” Ms Nankabirwa said.  

During the handover ceremony, Ms Nankabirwa was aware of the fact that many Ugandans  are afraid of using gas as they associate it with fire exposure.

On that issue, Ms Nankabirwa asserted that the government will sensitise on the usage of gas and mindset change to encourage the masses to use gas and break that bondage of stigma because they have no alternative

Noting that much as the government is coming up with those special cooking tariffs, we still have a challenge of last mile connection, while gas is portable to transport to where there is no electricity connectivity.

According to Mr Ma Peixin, the Vice President CNOOC, he said the LPG license is timely as it symbolises a long greater relationship between Uganda and China.

While handing over the licence to CNOOC, Ms Nankabirwa said there is also space  for local content as Ugandans can invest in the distribution of the gas cylinders in future when production begins.

 All LPG used in Uganda is currently imported from Arab oil producing countries through the Organisation of the Petroleum Exporting Countries (OPEC).
Uganda's national tree cover has declined over time due to a high reliance on biomass (firewood and charcoal) as the main source of cooking energy, which has a negative impact on the environment and public health.