Page 4 - AfrElec Week 35

AfrElec COMMENTARY AfrElec
Fuels in focus
in East Africa
Fuel news across the region illustrates sensitivity to fuel supply issues where mid- and downstream facilities are lacking
EAST AFRICA
WHAT:
A lack of pipeline and re nery access has led East African states to employ novel means of sourcing fuel while others remain precariously balanced between subsidies and fuel marketers
WHY:
The region is signi cantly lacking in downstream capacity, and pipeline and trucking links to coastal import terminals are relied upon for fuel
WHAT NEXT:
The completion of a re nery in Uganda is probably several years away and despite reports, Mozambique is not likely to build one
NEWS from throughout East Africa this week has illustrated the delicate situation the region finds itself with regard to the security of fuel supply, and host governments are keen to improve interconnectivity in the absence of local re neries.
A 60,000 barrel per day (bpd) facility is being built by the Albertine Graben Re nery Consor- tium (AGRC) at Hoima in Uganda to process oil produced from the country’s Lake Albert elds. However, a nal investment decision (FID) is not anticipated until mid-2020 a er France’s Total and China National O shore Oil Co. (CNOOC) delayed decisions on the upstream Tilenga and King sher projects respectively, as well as the East Africa Crude Oil Pipeline (EACOP), the heated conduit that will take the waxy crude to the Tanzanian port of Tanga.
The region’s only refinery was the Kenya Petroleum Refineries Ltd (KPRL) facility at Changamwe, Mombasa, which was transformed into a storage terminal in 2014 after ceasing re ning operations.
Short-term solution
With a lengthy wait before Uganda can start re ning its own crude, e orts have been made to facilitate cheaper and more e cient fuel imports.
is week, the rm developing a fuel stor- age and transport system in Uganda said that the project was around 70% complete ahead of operational start-up next year.
The facility, which is referred to as the Entebbe Jetty, is being built in Bugiri-Bukasa on the outskirts of Kampala and on the banks of Lake Victoria. It will allow for fuel to be trans- ported by barge across the lake from Kenya’s port of Kisumu rather than by truck, so reducing the “cost of fuel and its transportation by over 50%”, according to Captain Mike Mukula, chairman of engineering, procurement and construction (EPC) contractor Mahathi Infra Uganda.
Mukula told local press that the tanks were complete, while the jetties and ships were near- ing completion. He added that the journey from Kisumu to Bugiri-Bukasa was estimated to take 16 hours.
Once complete, the facility’s 14 tanks will have a fuel storage capacity of 70mn litres of gas- oline, diesel, jet A-1 and kerosene.
e tie-up will ease tra c on the congested
border crossing and will make use of the Kisumu Oil Jetty (KOJ), owned by Kenya Pipeline Co. (KPC).
The project was unveiled in March, when KPC’s acting managing director Hudson Andambi said: “We plan to use KOJ to export oil to our neighbours. e jetty is technically sound and we are now consulting with Uganda on how the two jetties will be operated in harmony.”
He added that dry testing of KOJ had been completed during the construction phase and a test run of facility would be carried out once a vessel for ferrying fuel had been made available by Mahathi.
In May 2017, KPC awarded a $170mn deal to Southern Engineering Co. (SECO) to construct the KOJ to facilitate export of fuel to Uganda and northern Tanzania, a deal which has since come under intense scrutiny along with several other KPC projects.
e Entebbe Jetty is being developed at a total cost of around $270mn and is expected to deliver fuel to Rwanda, Burundi, Uganda, northern Tanzania and eastern Congo (Brazzaville).
Similar story
While home to signi cant gas reserves, Mozam- bique is yet to build out its downstream sector. Over the past few years, there has been talk of developing a 350,000 bpd oil re nery by Oilmoz in collaboration with China National Petroleum Corp. (CNPC), though a project of such scale was never likely to be realised.
However, as the country’s LNG industry begins to grow legs, use of gas as a feedstock for fuels and other products is a far more viable solution.
Indeed, Portugal’s Galp Energia announced plans this week to invest $138.7mn in logistics to expand its fuel storage capacity in Mozambique.
Paulo Varela, Galp’s administrator in Mozam- bique, said that bases would be built in Beira and Matola for LPG storage and onward transpor- tation to Botswana, Congo (Brazzaville) and Zimbabwe, adding that the facilities would o er “greater security and reliability” of LPG supply.
During a meeting with Portugal’s Deputy Economy Minister Pedro Siza Vieira he said that the Matola terminal would “enhance the use of port and rail facilities to the bene t of Mozambique”.
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w w w . N E W S B A S E . c o m Week 35 04•September•2019