{"id":413710,"date":"2011-05-02T02:32:38","date_gmt":"2011-05-02T02:32:38","guid":{"rendered":"http:\/\/www.ghanamma.net\/2011\/05\/02\/nation-starts-pumping-oil-in-june\/"},"modified":"2011-05-02T02:32:38","modified_gmt":"2011-05-02T02:32:38","slug":"nation-starts-pumping-oil-in-june","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2011\/05\/02\/nation-starts-pumping-oil-in-june\/","title":{"rendered":"Nation Starts Pumping Oil in June"},"content":{"rendered":"
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\"New<\/a><\/p>\n

Ibrahim Kasita<\/p>\n

30 April 2011<\/p>\n

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UGANDA expects to pump its first oil in June starting with 500-1,000 barrels per day. Three oil wells: Kasamene 1, Kigogole 1 and 3 in the Lake Albert rift will produce the first oil as tests to understand their behaviour and rate of flow (Extended Well Testing) are conducted. The test crude oils to be sold for domestic purposes.<\/p>\n

The Petroleum Exploration and Production Department (PEPD) has encouraged Tullow Oil Uganda not only to burn the test crude (flaring) to save the environment from pollution but also sell the oil to heavy industries.<\/p>\n

The first oil will be sold to Hima Cement, which in turn will use it as raw material for cement production, meaning that cement prices will significantly reduce, boosting the construction industry.<\/p>\n

Test-extracted crude oil will be loaded onto specialised trucks and transported to the Kasese-based factory.<\/p>\n

“We are buying the crude to fire our kiln,” a highly ranked source in the factory said. “We are modifying our storage tanks in accordance with the National Environment Management Authority (NEMA) standards to store the crude oil that we shall buy.”<\/p>\n

Tullow Oil in its just published 2010 annual report said the testing of the crude is planned to commence in the “second quarter of 2011 and the test crude is to be sold to a domestic industry user”.<\/p>\n

This signifies a new beginning of Uganda’s fully-fledged petroleum industry with “phased development” of a refinery to process kerosene, diesel, petrol and jet fuel as well as heavy-fuel oil as a long-term answer to fuel supply shortages and unpredictable prices.<\/p>\n

“Government is considering phasing the development to start with 20,000 barrels per day,” Peter Lokeris, the state minister for energy, said.<\/p>\n

“This will be upgraded to 60,000 barrels per day in the medium term, with further expansion to 120,000 per day in the long term.”<\/p>\n

Uganda’s oil is “sweet and waxy” meaning it contains little sulphur, which is good but being waxy means it solidifies at room temperature, making it very expensive to transport as crude. Futhermore, its location is far off and the oil is also difficult to extract.<\/p>\n

A feasibility study conducted by a UK international energy firm, Foster Wheeler, confirmed that building a refinery was a cheaper and profitable option, a strategy that will ensure value addition and a steady supply of petroleum products.<\/p>\n

“Because the crude oil is waxy, this means that transportation to Mombasa would require continuous heating.” Robert Kasande, the Assistant Ccommissioner in petroleum exploration and production department, explained.<\/p>\n

“In the case of a pipeline, it would be costly to build and maintain such a pipeline. However, if we have surplus crude exceeding regional demand, then we can think about export,” he said.<\/p>\n

The energy ministry said 20sq kilometres of land have been mapped for the facility in Kabaale in Hoima and is negotiating with local authorities and land owners for compensation on a “willing buyer, willing seller” basis.<\/p>\n

But interestingly, gas production is likely to come earlier than a refinery. Uganda has discovered 14 million cubic metres of natural gas at Nzizi gas field, which is expected to deliver gas to a new power plant.<\/p>\n

According to Tullow Oil, the first gas which is subject to gas agreements and the readiness of the power plant could be produced by next year.<\/p>\n

To produce electricity, gas is burned. It produces large amounts of heat and can be used to run large power turbines or turn steam turbines by heating water. Some of the gas may be containerised for household consumption. Nzizi gas field is relatively small but it is enough to power a 50MW power plant.<\/p>\n

One of the aims of National Oil and Gas Policy of 2008 is to use the country’s oil and gas resources to contribute to early achievement of poverty eradication and create lasting value to society prioritising value addition to the crude oil by undertaking petroleum refining in-country.<\/p>\n

Although the 1,000 barrels per day are not economically significant, it is a great step forward for Ugandans to know that their oil is being used for industrial use.<\/p>\n

<\/p>\n

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