OIL BOOM! Shs1.2tn Kampala Petroleum Terminal Launched, Ready by 2028
President Yoweri Museveni has commissioned the construction of the Kampala Storage Terminal (KST), a major infrastructure project in the oil and gas industry. The terminal, located in Nsujjumpolwe Village, Kiringente Sub-county, Mpigi District, off the Kampala-Mityana Road, will serve as a petroleum storage facility for finished products from the planned Hoima Petroleum Refinery.
Owned and operated by the Uganda National Oil Company (UNOC), KST is also planned to accommodate imported petroleum products, significantly increasing the country’s storage capacity beyond the 13-million-litre Jinja Storage Facilities. The facility, which is set on a 300-hectare site, is designed to hold up to 320 million litres of refined petroleum products at full capacity, equivalent to about 30 days of national consumption. It will also include an extension for Liquefied Petroleum Gas (LPG).
UNOC Board Chairman Mathias Katamba says the facility will generate about 30 million dollars, or approximately 118 billion shillings, annually from storage service charges. According to UNOC, the terminal will also serve as a strategic national reserve, a hub for oil marketing companies and a terminal point linked to the planned Hoima-Kampala pipeline.
During and after construction, UNOC expects the project to create considerable opportunities for Ugandans in areas including fabrication, accommodation, construction, transportation, waste management and pipe works. The project is projected to cost about 309.7 million dollars, equivalent to 1.19 trillion shillings, and will be connected to the Hoima refinery by a 211-kilometre pipeline.
Irene Batebe, the Permanent Secretary at the Ministry of Energy and Mineral Development, says the facility will add 30 days of storage capacity to the country’s petroleum reserves. Batebe and Katamba say the project comes at a time when supply security has become increasingly critical, especially following the ongoing conflict involving the United States, Israel and Iran, which they say has disrupted the global oil value chain.
Batebe adds that after the completion of KST, UNOC will move on to implement the planned regional storage hubs. UNOC and its partners have been given 24 months to complete construction of the facility. Monica Musenero, the Minister for Energy and Mineral Development, says the completed project will provide the country with an adequate buffer against emergencies.
The facility will also have dedicated road infrastructure connecting it to the Mahathi Infra Uganda Ltd petroleum storage and transport logistics terminal in Kawuku, Entebbe, completing a Lake Victoria petroleum logistics and delivery chain. Other developments to support the terminal include a first-class road network connecting it to the Kampala Northern Bypass and the Entebbe Expressway.
Musenero also identified a nearby garbage dumping site as a major challenge. The site is located just over one kilometre away in neighbouring Buyala Village. Apart from the inconvenience of sharing roads with garbage trucks, Musenero says the dumping site poses fire risks similar to those witnessed at Kiteezi in Wakiso District.
She says the garbage site, owned and operated by Kampala Capital City Authority (KCCA), was planned and developed long after the KST site had been acquired and gazetted for development. She called for intervention to ensure that the dumping site does not pose a threat to the terminal and surrounding areas.
President Museveni hailed ongoing developments under UNOC, including the company’s sole importation of petroleum products, which he says has helped ensure supply and price stability even during periods of disruption. He described the terminal project, which will facilitate the movement of petroleum products through pipelines, as a smart investment because pipelines avoid some of the risks associated with road transportation.
“But me, I’m not comfortable with that plan—transporting oil via water. I don’t like it, and I even told them. What if there is an accident?” he said, suggesting that the ministry and its partners focus on pipelines and railways. “That is why the EACOP moves around the lake; otherwise, going through the lake is very dangerous,” he said.
The President also spoke against the presence of a garbage dumping site near the KST.
“It is very dangerous because there is always a risk of fire. We shall not allow it near here,” he said, adding that technologies such as waste incineration and conversion should be prioritised.
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