A Swiss engineering company has confirmed that constructing an oil refinery in Uganda is a viable venture.
The company, Foster Wheeler, conducted a feasibility study that suggests the 150,000 barrel-per-day refinery will create boost Uganda's economy by saving one billion dollars annually.
Oil industry magazine, Engineering News, reports that the feasibility study will enable Uganda to source funds for the project. Construction of the refinery is expected to cost two billion shillings.
China, Libya and Iran have already expressed interest in partnering with Uganda in the construction of the facility.
The study shows that using the refinery in Mombasa could be expensive, as it would cost 1.7 billion dollars to build a pipeline from the cost.
The Engineering News report confirms a statement made by Energy Ministry Permanent Secretary Fred Kabagambe Kaliisa that construction of the refinery will begin in 2012.
Kaliisa says four possible locations have been proposed for the plant. They are Biiso in Buliisa, Buseruka in Hoima and locations in Nakasongola.
The Permanent Secretary says the site in Kabaale in Buseruka Sub-County is favored because of its proximity to the oil wells off the shores of Lake Albert. He also notes that it is near River Wambabya, a good source of water for the refinery.
Kabagambe Kaliisa says the construction of the refinery will take three years. He says if a site is found soon, construction could begin as early as next year.
On Thursday Ministry of Energy and Minerals officials met local council authorities in Buseruka. The State Minister for Minerals Peter Lokeris said 20 square miles were needed for the project. He said government would proceed with the land purchase cautiously in order to avoid conflicts that have dogged oil-producing countries like Nigeria.