| By Ibrahim Kasita
UGANDA will save more than $400m (about sh650b) annually on imports when oil production starts next year.
Imported oil expenditure is spent on unleaded premium gasoline, regular petrol, industrial diesel, fuel oil and special products such as bitumen and grease.
The Government and Tullow Oil, the firm exploring oil and gas in western Uganda are in advanced stages for an early production system.
The system will utilise the discovered oil in the Kaiso-Tonya region.
The project has been designed to produce about 4,000 barrels of oil per day of heavy fuel oil and petroleum products.
According to Tullow Oil�s trading statement and operational update, a proportion of the heavy fuel oil will be utilised in a local power generation plant.
The balance would be exported by trucks onto the local and export markets.
It is expected that 1,800 barrels per day of heavy-fuel oil will be used to generate about 57 megawatts of electricity onto the national grid.
The construction of the local power generation and transmission lines will be conducted by Jacobsen Elektro with whom Tullow recently signed a deal.
This will cut down on Kenya�s petroleum earnings. It will also reduce on Uganda�s dependence on Kenya�s refineries for petroleum products.
Uganda, a landlocked nation, is the biggest consumer of Kenya�s petroleum exports, taking in more than 30% of all exports.
The early production system is expected to significantly reduce its intake of imported petroleum products, reducing a huge market for the Kenya Petroleum Refinery Ltd, the Kenya Pipeline and the owners of trucks which transport the oil products from depots in western Kenya. This is also expected to reduce road destructions by heavy trucks and reduce accidents.
Kenya refinery processes 1.6 million tonnes of crude oil annually to produce a wide range of petroleum products for local and regional markets.
It is estimated that the new refinery will produce 3,180 of fuel oil, 500 of diesel and 120 of kerosene per day. Uganda has ruled out exportation of oil but for only domestic use.
consumption. Last year, Kenya exported 216,000 tonnes. |
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