Uganda’s Refinery Project Tender Progresses to the Negotiations Phase - Africa’s premier report on the oil, gas and energy landscape.

Uganda’s Refinery Project Tender Progresses to the Negotiations Phase

KAMPALA, 24th June 2014– Two of the four bidders that submitted proposals to the Government of Uganda (GOU) for the role of lead investor for  the 60,000 barrels per day (BPD) oil refinery and related downstream infrastructure have been invited to progress to the next stage of the tender process.   This followed the issuance of a Request for Proposals (RFP) for the Uganda Refinery Project during January 2014 with a submission deadline of 30th May 2014.

“The RFP required the submission of a Bid Bond, and detailed technical, financial and commercial plans to develop, finance, build and operate the Project in partnership with the GOU, among other requirements. The bidders were also required to review and comment on draft Principal Project Agreements”, Mr. F.A Kabagambe-Kaliisa, Permanent Secretary of the Ministry of Energy & Mineral Development (MEMD) revealed.

The two bidders that have been invited to progress to the next stage of the tender process are; SK Group led Consortium (South Korea) and RT Global Resources led Consortium (Russia). The proposal from Marubeni Corporation was not evaluated due to lack of a bid bond as required by the RFP, while China Pipeline Petroleum Bureau’s proposal did not adequately satisfy all the requirements of the RFP.

The evaluation was conducted during June 2014 by a team comprising of representatives of Government of Uganda supported by the Government’s Transaction Advisor, Taylor –Dejongh.

“Government will commence negotiations with the two preferred biddersand thereafter issuea request for the Best and Final Offers (“BFO”) document. The two consortia will be expected to submit their respective Best and Final Offers by the end of August 2014. Government will then negotiate the Principal Project Agreements with the highest scoring Preferred Bidder and once executed, take forward the development of the project”, Mr. Kaliisa added.

Uganda’s refinery project is to be established under a public private partnership (PPP) arrangement with the Government holding up to 40% equity.  It involves development of a refinery with a capacity of 60,000 BPD, development of crude oil and product storage facilities on site, as well as a 205-kilometer product pipeline to a terminal near Uganda’s capital city of Kampala.The first phase of the refinery is expected to be in place by 2017/2018.

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