Buyuma Weekly Uganda Energy Roundup(Wk #6) - 2024

Hello There,

Welcome to this week's?Buyuma Ugandan oil and gas weekly update?covering?the latest energy?news that made waves in Uganda.

The Minister, Ruth Nankabirwa the beginning of this month as required by the law published a legal notice calling for the public or directly affected parties, and local governments in areas where the Tilenga Petroleum Gas facility is to be located to inspect documents submitted by TotalEnergies.

The law provides that the affected parties can object to the granting of the license to construct the facility. The hearing in the TotalEnergies application is open up to the end of February.

Below are?updates that made the headlines in Uganda's Oil and Gas sector

TotalEnergies seeks license to produce gas at Tilenga

TotalEnergies has notified the government about its plan to produce Liquefied Petroleum Gas at the Tilenga Development Area.

The oil and gas explorer wrote to the Minister of Energy at the end of last month asking for a license to construct the Tilenga Liquefied Petroleum Gas Facility.

According to the documents, TotalEnergies Uganda E&P (TEPU) which is part of the French super-major TotalEnergies plans to produce 80,000 tons of Liquefied Petroleum Gas per year.

Even before the Final Investment Decision (FID), TotalEnergies had promised that there would be zero routine gas flaring in Uganda.

Gas flaring contributes to climate change by releasing millions of tons of carbon dioxide and methane into the atmosphere.

The government of Uganda had equally made it clear that no flaring would be allowed at the Kingfisher Development area operated by 中国海油 Uganda and at the Tilenga Development area operated by TotalEnergies Uganda E&P.

Gas conversion is one of the operations in the Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act, 2013.

The government required the Upstream licensees; Total Energies E&P Uganda & CNOOC Uganda, to carry out studies to determine the optimal utilization of any excess associated gas realised after meeting the internal requirements.

The studies recommended LPG recovery from excess associated gas. The recovered LPG will be used to meet local and regional demand.

The Minister of Energy is required by law to issue a license for the construction and operation of gas conversion facilities in the fields.

The process of the award of the license includes the public inspection of the documents submitted by the planned operator of the conversion facilities.

The Minister, Ruth Nankabirwa the beginning of this month as required by the law published a legal notice calling for the public or directly affected parties, and local governments in areas where the Tilenga Petroleum Gas facility is to be located to inspect documents submitted by TotalEnergies.

The law provides that the affected parties can object to the granting of the license to construct the facility.

The hearing in the TotalEnergies application is open up to the end of February.

Nankabirwa’s legal notice came just a week after she had granted construction and operation licenses to CNOOC Uganda Limited to put up a Liquefied Petroleum Gas (LPG) facility as part of the Central Processing Facility at the Kingfisher oil fields in Kikuube district.

According to Nankabirwa, putting to use some of the oil industry by-products such as LPG shall be critical in rescuing the country’s forest cover by getting millions of Ugandans off wood charcoal for cooking, thereby contributing to a more sustainable environment.

Enach Steven , the Manager of Refining, Gas Processing and Utilisation at the Petroleum Authority of Uganda (PAU) has in the past indicated that Uganda will produce 100,000kg of liquified petroleum gas (LPG) annually at the peak of commercial oil production from the Albertine Graben.

“As per the ongoing engineering design studies, the Refinery Project in Hoima is projected to produce LPG in its product slate. In total, the three projects (Tilenga Project area, Kingfisher Development area and the Refinery) are projected to produce about 330, 000 tons/year of LPG at peak,” said Enach.

Uganda Targets $5bn Per Annum from Kabalega Industrial Park

The Hoima-based Kabalega Industrial Park (KIP) will contribute about $4.9bn per annum to the national Gross Development Product (GDP), Uganda National Oil Company Limited (UNOC) revealed on Monday afternoon.

KIP, which sits on a 25.97 square meter expansive land, is among UNOC’s key midstream projects.

“Preliminary economic modeling by UNOC of KIP, with its wide range of industries and commercial activities supported by the international Airport and our national road network, is expected to yield up to USD 4.9 bn per annum to National GDP,” said UNOC.

KIP comprises Uganda’s Kabaale International Airport which is under construction, the crude Oil Export Hub-beginning of the East African Crude Oil Pipeline (EACOP); Uganda greenfield Refinery; polymer and fertilizer industries; light /medium industries; agro-processors; warehousing and Logistics.

Other land uses in the park will include commercial, retail, Health Centre IV, and residential spaces. UNOC said KIP will also help Uganda in adding up to 11.9 bn per annum to the National Capital Formation.

The park is also expected to improve Uganda’s Balance of Payments by USD 849 million per annum; create a fiscal impact of USD 1.2 bn per annum and create 35,000 job opportunities.

Officials say construction of the Kabaale International Airport is at about 95% completion phase.

EACOP faces fresh hurdles as insurance firms stay away

Several insurance companies have opted out of insuring the East African Crude Oil Pipeline (EACOP), adding to the project’s unending woes that have delayed construction for four years.

A total of 28 insurers have so far declared they will not insure EACOP following pressure from climate activists, who argue that the project poses significant pollution and human rights risks.

However, 美亚保险 , Tokio Marine Group , Chaucer Group and Hiscox are still willing to insure the project.?

Last week, SiriusPoint , RiverStone?International , Enstar Group , and specialty insurers Blenheim and SA Meacock all ruled out insuring the transboundary project.

Riverstone International said in a statement that it “does not underwrite the Eacop project directly or indirectly, and nor does it intend to.” SiriusPoint said it was “not participating in the Eacop tender” while Enstar, Blenheim and SA Meacock offered equally clear statements.

These decisions come after months of targeted efforts by environmental organisations, including Coal Action Network , Insure Our Future Global and StopEACOP, to hold insurance firms accountable for their involvement in dirty energy projects that endanger local communities and pollute vital ecosystems.?

France Prioritizes Water& Energy Sector Funding in Uganda

The French government has invested 73.5 million euros in ?the water treatment plant on Kagera River to ensure that people of Isingiro district, especially refugees at Nakivale camp can access clean drinking water.

French Ambassador to Uganda Xavier Sticker says once completed, the plant will provide water to 350,000 inhabitants of Isingiro.

“The plant will be delivered this year between the summer and the autumn. And with the subsequent work on the pipes, within less than two years it will provide drinking water to 350,000 inhabitants of the whole of Isingiro and refugees by the way" said Ambassador Sticker.

In the energy sector, the French Development Agency, together with the European Union, and the EU Investment bank is funding the rehabilitation of the Kiira-Nalubale dam electricity plant in Jinja along the banks of river Nile.

Ambassador sticker says the objective is to ensure that the dam realises its full potential production which is 380 megawatts of electricity.

“That is also a game changer as Uganda is working hard on its industrialization transforming its natural resources in the country. So we are happy and privileged to be partners for Uganda on that” he states France is also working on a project which will provide direct exposure to French learners in part contribution to Uganda’s education sector."

Under this arrangement the French government will be offering learners more resources in terms of scholarships and more opportunities for Ugandan students to visit French Universities and vice versa to improve their education.

It was revealed that up to 12 French universities will be visiting Uganda in the first week of the month of March in 2024.

“They will interact not only with the education system in Uganda but also the Ugandan universities to see how they can improve the curriculum and ensure that some French students can do part of their curriculum in Uganda, and that some of Ugandan students can do part of their curriculum in France” he averred.

Ambassador Xavier and his team pledged his government’s continued cooperation on values ?especially women’s rights, ?supporting rights defenders, refugees in the Nakivale and Kyangwali camps where through UNHCR, the UN Refugee Agency , the embassy ?has committed 900,000 euros to fund the salaries of 37 secondary school teaches.

Ugandan-Norway Bilateral cooperation yields results for energy sector

One of the Norway and Uganda government interventions in the energy sector education is yielding sustainable results.

This comes after Makerere University Business School (MUBs) graduated eight PhD students and over five master’s degree students in Energy Economics and Governance, funded by NORAD, at the 74th Makerere University graduation ceremony that took place between January 29, 2024-February 2, 2024.

According to Dr. Ezra Muhumuza, the Executive Director of Uganda Manufacturers Association (UMA), such studies are necessary at the time when the country is moving towards development of its oil and gas sector as well as the need to use existing energy resources sustainably.

“Uganda is the first country in the East African Community to introduce the Energy Economics and Governance programme, which looks into economic sense of using and managing the different sources of energy. We take this as a good move because we are going to increase knowledge, skills and research capacity for efficient energy resources management and governance in Uganda,” Dr Muhumuza said.

Speaking to New Vision, Dr Livingstone Senyonga, a senior lecturer at Mubs, said the University received funds under the project titled

“Capacity Building in Education and Research for Economic Governance in Uganda”, and the project has created so many opportunities for Uganda.

He noted that there is a growing number of graduates with PhD and Masters in Energy Economics and Governance because many have been trained and skilled, both at MUBS and in Norway.

Prof. Mohammed Ngoma together with Dr. Bosco Amerit, the head of Business Administration at Mubs, noted that for along time when you talked about energy people, people would run to science and technology courses.

As a Business School they saw a gap in the economics of the energy and that is how they introduced the programme.

Specifically, to train advanced strategic thinkers and techno-economic planners for the energy sectors to supplement the technical human resource provided by engineering and geology programmes.

That's it for this week. Until next time, Cheers!