Uganda is on the cusp of two landmark energy milestones that could reshape East Africa’s petroleum landscape: a Final Investment Decision on a $4 billion oil refinery expected by July 2026, and the long-delayed East African Crude Oil Pipeline (EACOP) project now firmly advancing — even as Kampala insists its ambitions are complementary to, not a threat against, regional partner Kenya.
Dubai-based Alpha MBM Investments LLC and the Uganda National Oil Company (UNOC) have signed a key agreement on the refinery project, with Alpha MBM taking a 60 per cent equity stake and UNOC retaining 40 per cent. Planned for the Albertine Graben region, the facility is designed to process up to 60,000 barrels of crude oil per day and is expected to be completed between 2029 and 2030. The arrangement follows years of unsuccessful negotiations with previous partners and is being presented by Kampala as evidence of renewed investor confidence.
Uganda’s Energy and Mineral Development Minister Ruth Ssentamu confirmed that Uganda expects its first oil this year, while stressing that the Tanzania pipeline and refinery plans are not acts of rivalry toward Kenya. Speaking in Nairobi, Ssentamu said Uganda’s recent acquisition of a 20.15 per cent stake in Kenya Pipeline Company demonstrated the country’s commitment to cross-border investment and cooperation. “This demonstrates the scale of cross-border cooperation, infrastructure planning and investment coordination which is required to unlock Africa’s petroleum resources in a structured and economically viable way,” she said.
EACOP: The 1,443km Pipeline That Changed East Africa’s Calculus
The 1,443-kilometre East African Crude Oil Pipeline, designed to transport crude from Uganda’s Lake Albert to Tanzania’s Port of Tanga, was chosen over a Kenya route in 2016 due to better security conditions, lower costs, easier land acquisition, and the immediate availability of the Tanga port compared to the then under-construction Lamu port. Uganda sits on an estimated six billion barrels of oil reserves, and the refinery is intended to slash the country’s $2 billion annual petroleum products import bill — the bulk of which currently flows through Kenya.
Kenya Pipeline Company (KPC) has moved to contain alarm over the potential impact, stating that the Uganda refinery will take up to 15 years to come fully online, and outlining at least Sh110 billion in capacity expansion plans, including a new eastern pipeline from Mombasa to Nairobi, the Eldoret-Malaba-Kampala pipeline, a Nairobi LPG storage facility, and crude oil storage at Mombasa. Uganda currently receives about 90 per cent of its refined petroleum — approximately 2.5 billion litres annually — via the Port of Mombasa and the KPC network.
Source: the-star.co.ke