revised eac harmonized fuel standards,...

The content of this presentation is proprietary and confidential information of the Uganda National Oil Company Ltd. It is not intended to be distributed to any third party without the written consent of UNOC.

Revised EAC Harmonized Fuel Standards, Nairobi

29th January 2019

Dr. Michael Nkambo Mugerwa

The content of this presentation is proprietary and confidential information of the Uganda National Oil Company

Uganda Oil & Gas Sector Governance

Key Sector Roles Responsible Institution

Regulation Petroleum Authority of Uganda (PAU)

Policy, Investor Promotion &

Licensing

Ministry of Energy and Mineral Development (Petroleum

Directorate)

Commercial Uganda National Oil Company (UNOC)

Fiscal Regime Ministry of Finance, Planning and Economic Development

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▪ The Uganda National Oil Company (UNOC) Ltd. was established under the Petroleum (Exploration, Development and Production) Act, 2013

▪ UNOCs main roles include:

1. Handle the state’s commercial interests in the petroleum sub-sector;

2. Develop in depth expertise in the oil and gas sector;


Company Overview

▪ UNOC was incorporated in June 2015 under the Companies Act (2012) as a private limited company

▪ Wholly owned by the Government of Uganda – two shareholders:

o Ministry of Energy and Mineral Development (51%)

o Ministry of Finance, Planning and Economic Development (49%)

▪ 7 Board members, CEO appointed on 1st August 2016, and current staff of 59 and growing

▪ Subsidiaries – currently wholly owned by UNOC:

o The Uganda Refinery Holding Company Ltd – Responsible for refining and petrochemical related businesses

o The National Pipeline Company (Uganda) Ltd – Responsible for pipeline, storage and downstream trading ventures

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The content of this presentation is proprietary and confidential information of the Uganda National Oil Company 4

Strategic Themes that

enable National

Participation

Vision

To be an innovative

and profitable company

that operates across the

petroleum value chain

for the benefit of all

Ugandans

Partner

Strategically

Invest in

People

Build the

Business

To drive sustainable growth of the

Oil & Gas sector through strategic partnerships and

championing national participation

Mission

(2018-2023)

Operationalise UNOCs Balance Scorecard• Financial initiatives and KPIs

• Stakeholder initiatives and KPIs

• Operational initiatives and KPIs

• Learning & Growth initiatives and KPIs

Deliver Strategic Projects

• Upstream

• Midstream

• Downstream

• Joint Ventures for Service Delivery

5-year strategic investment plan Finances needed to deliver the Strategic Projects and operationalize the UNOC Balance Scorecard

OVERVIEW OF UNOC STRATEGY

Maximum

shareholder

value from

our

investments

Operational

excellence

that drives

continuous

improvement


Licensing

Exploration

Appraisal

Development

Production

U P S T R E A M M I D S T R E A M D O W N S T R E A M

Transportation

Refining

Gas processing

Distribution

Marketing

Sales

▪ State Participation

▪ Launching New Ventures▪ Storage Terminals

▪ Trading

▪ Refinery

▪ Industrial Park

▪ Crude Pipeline

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DELIVER STRATEGIC PROJECTS

Joint Ventures for Service Delivery

Petroleum Value Chain


Uganda Refinery Holding Company

URHC’s overall strategic objective within UNOC is to manage the commercial and business interests of the State in the Uganda Refinery and the Kabaale Industrial Park, yielding five (5) current strategic initiatives:

▪ Secure investors in the Refinery and the Kabaale Industrial Park (KIP), including finance for GOU Equity stakes, as well as credit support for Debt Completion

▪ Negotiate and execute all relevant Refinery and KIP Agreements, including, inter alia, Project Framework, Commercial, Joint Venture, Implementation and EPC Agreements

▪ Ensure that the FEED, ESIA, RAP, Permitting, FID, EPC and Commissioning for the Refinery Project are executed within budget and schedule during the calendar years 2019 to 2024, and are undertaken in line with upstream timelines

▪ Manage, develop and operationalize the Kabaale Industrial Park with an internationally recognized Joint Venture partner, and put in place a plan to establish and market KIP as a petro-based complex

▪ Ensure that the Refinery is operated and maintained within the standard of the Reasonable and Prudent Operator

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UNOC SUBSIDIARY: URHC


Kabaale Industrial Park Development

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▪ Kabaale Industrial Park (KIP) o MEMD acquired 29.57 km2 (7,307 acres) of land to be developed into an oil and gas industrial park, in

Kabaale, Hoima District

o MEMD handed UNOC the role of leading the development, operationalization and management of the industrial park with a strategic JV partner

▪ KIP to accommodate:o Uganda’s 2nd International Airport – Currently under Construction

o Crude Oil Export Hub – FEED finalized; FID expected by August 2019

o Uganda Refinery – Under Pre-FID

o Polymer and Fertilizer Industries – Investor Promotion

o Light Industry – Investor Promotion

o Agro-Processors – Farmer Sensitization & Investor Promotion

o Warehousing & Logistics – Investor Promotion

▪ KIP Master Plano Developed by SMEC International with key stakeholders

o Approved by National Physical Planning Board

o Provides for the development of utilities (power, water, gas), infrastructure (road network, ICT), services (waste water treatment, solid waste handling), etc.

STRATEGIC PROJECTS: INDUSTRIAL PARK

The content of this presentation is proprietary and confidential information of the Uganda National Oil Company8

STRATEGIC PROJECTS: INDUSTRIAL PARK


Uganda Refinery Development

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▪ Refinery Project Framework Agreement (PFA) between Albertine Graben Refinery Consortium (AGRC), MEMD and UNOC was signed in April 2018; and effective from September 2018

▪ PFA Purpose:

o To establish a legal framework for financing and planning Refinery Project development activities through to the Final Investment Decision (FID)

▪ Scope of Work:

o Technical Workstream: Final Refinery Configuration, FEED, ESIA, Consents, National Content &

Upskilling Plan, O&M Plano Financial Workstream: Project Financial Modelling; Equity and Debt Raises – GoU; AGRCo Legal Workstream: Commercial Agreements (crude oil, products, EPC, O&M); JV (Implementation,

Shareholder)

▪ Term:

o Final FEED completion at 15 months & FID ready at 24 months from Effective Date

▪ Estimated Cost of Pre-FID Activities:

o Approx. US$90 million

STRATEGIC PROJECTS: REFINERY


Uganda Refinery Project – Overview

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▪ FEED Contractor: Saipem SpA, Milan, Italy

▪ Capacity: 60,000 bpsd

▪ Refinery at Kabaale, Hoima District; 220 km Multi-Products Pipeline; Kampala Receiving Oil Terminal

▪ EACOP Crude Oil Pipeline of 216,000 bpsd capacity – 1445 km from Kabaale to Tanga, Tanzania

▪ Design Feedstock: Local Crude Oils from Albertine Graben

▪ TBP Curve: IBP 36°C; 50% distilled 472°C; FBP 915°C

▪ Light end composition (C1 to n-C4): 28.4% (referred to whole crude)

▪ Refinery Configuration Studies: FEL-2 in final phase; Future polymer & fertilizer production critical

▪ Pros/cons of four (4) configuration options for “bottom of barrel” processing under review

▪ Regional market driven – EAC Countries, South Sudan & Eastern DRC

▪ Logistics constraints under study

▪ Commercial Viability Assessment underway

▪ Geotech, hydrological studies underway

▪ ESIA to commence

STRATEGIC PROJECT: REFINERY


Uganda Refinery – Product Specifications (1)

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▪ LPG – Max olefins: 30 mole %; Max C2 & lighter: 3 mole %; Max C5 & heavier: 2 mole %

▪ Petroleum Motor Spirt / Gasoline – Premium (Euro V)

▪ Min RON: 95

▪ Max RVP: 60 kPa

▪ Max olefins: 18 vol %

▪ Max aromatics: 35 vol %

▪ Max benzene: 1 vol %

▪ Max sulfur: 10 ppmw

▪ Petroleum Motor Spirt / Gasoline – Regular

▪ Min RON: 93

▪ Max RVP: 65 kPa

▪ Max olefins: 18 vol %


▪ Max benzene: 1 vol %

▪ Max sulfur: 50 ppmw



Uganda Refinery – Product Specifications (2)

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▪ Jet A-1 Fuel


▪ Min flash point: 38°C

▪ Max freezing temp: -47°C

▪ Atmospheric Gasoil / Diesel (Euro V – Summer Grade)

▪ Min Cetane Number: 51

▪ Max Sulphur: 10 ppmw

▪ Min flash point: 55°C

▪ Fuel Oil

▪ Export – Resulting Quality

▪ Bitumen

▪ None

▪ Electric power

▪ Self-sufficient, with grid back-up



Uganda Refinery – Environmental

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▪ Emission Standards – Air, Water & Noise

▪ World Bank Guidelines

▪ EHS Guidelines – Petroleum Refining – November 2016

▪ General EHS Guidelines – April 2007

▪ Industry Sector Guidelines – December 2008

▪ EHS Guidelines for Crude Oil and Petroleum Product Terminals – April 2007

▪ Ugandan Environmental, Health and Safety Laws & Regulations

▪ Numerous



Uganda Refinery – Conclusions

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▪ Market demand driven with petroleum product slate targeting:

▪ Uganda

▪ Kenya

▪ Tanzania

▪ Rwanda

▪ Burundi

▪ South Sudan

▪ Eastern DRC

▪ Compliant with Revised EAC Harmonized Fuel Standards, including EURO V Diesel

▪ EURO V capable for PMS / Gasoline

▪ EAC Standard for LPG is needed

▪ EHS Compliant with World Bank Guidelines & applicable Ugandan EHS Laws and Regulations for Air,

Water & Noise Emissions


The content of this presentation is proprietary and confidential information of the Uganda National Oil Company Ltd. It is not intended to be distributed to any third party without the written consent of UNOC.

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