Reports Leo Odera Omolo

REPORTS emerging from the Ugandan capital of Kampala say that country has now shelved plans to transport its crude oil using a pipeline through either Kenya or Tanzania.

This decision is based on a study that established that laying a 1,325 kilometer pipeline to transport the crude would be more costly, at USD 2 billion than building a phased 120,000 barrels per day refinery which would cost only USD 1.6 billion.

Some industry analyses argue that Uganda will suffer from excesses capacity of crude with a small local market for the products.

“I against building a refinery that exceed local demands. There should be a balance between the local demand and the refiner”, Mr. Joel R .Couse, the vice president for Total SA market analyst, was quoted in the local media as having said this.

Uganda’s demand is 11,000 barrels per day {bpd} and this figure is expected to each 15,000 bpd against the proposed refinery’s 120,000bpd at its full capacity.

An expert from the petroleum and exploration department of the Ministry of Energy said appraisal is still going on more fields with oil deposits will be found. This will leave the country with excess crude oil that need not to be refined.

Official in Kampala estimates put the reserves a2.5 billion barrels of oil and are projected to reach 5 billion barrels, which would be more than adequately provide East African states energy and fuel supplies for the next 20 years.

An expert from the Kenya Oil Pipeline Corporation Ltd, a government parastatal has encouraged Uganda to use the pipeline option, saying KPLC is reliable, has a right of way in the region and is cheap with a lower than 5 per cent tariff.

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