President Yoweri Kaguta Museveni has presided over the groundbreaking ceremony for the construction of the 320-million-litre Kampala Storage Terminal in Mpigi District, describing the project as a major step towards strengthening Uganda’s petroleum security and fuel supply capacity.
The terminal, being developed by the Uganda National Oil Company (UNOC), will be constructed on 300 acres of land at an estimated cost of US$250 million.
The facility is intended to increase Uganda’s capacity to store refined petroleum products and support the establishment of strategic national fuel reserves.
Uganda currently has an estimated petroleum storage capacity of 160 million litres, comprising a 30-million-litre facility in Jinja, a 70-million-litre facility operated by Mahathi at Kawuku and about 60 million litres held by private-sector fuel companies.
Museveni said the expansion of storage capacity was necessary as Uganda develops its petroleum resources and seeks to strengthen security of supply.
“When we took over government in 1986, we tried to hand over the administration of government to the learned technocrats in the ministries. Now, in the Ministry of Energy, with Permanent Secretaries and Commissioners, it took a Senator in Kenya to bring a serious matter to my attention that Uganda was buying petroleum products through middlemen in Kenya. Unbelievable,” Museveni said.
The President said government subsequently intervened in the procurement and supply chain, resulting in reductions in the cost of petroleum products.
He cited diesel prices falling from US$118 to US$83 per metric tonne, petrol from US$97.5 to US$61.5 per metric tonne and aviation fuel from US$114.25 to US$79.25 per metric tonne.
“Now that we are moving well on developing our resources, we must plan for storage,” Museveni said.
He said the terminal would contribute to strategic reserves and improve the reliability of fuel supplies, but cautioned that the project should not be considered the final solution to Uganda’s storage requirements.
Museveni also commended Vitol Bahrain for supporting Uganda’s petroleum supply chain, including by supplying petroleum products on credit, with the government making payments when funds become available.
The President welcomed increased cooperation among East African countries in developing petroleum infrastructure.
He said Uganda would participate in the development of a larger refinery in Tanga, Tanzania, as part of regional efforts to strengthen petroleum security.
“I am happy that Her Excellency Samia Suluhu has sent a delegation, so we are working together with East Africa to develop our petroleum,” Museveni said.
Museveni cautions against environmental degradation
Museveni also urged residents of Mpigi to protect wetlands and other natural ecosystems, saying he had observed extensive papyrus wetlands on his way to the project site.
“This is how God made Uganda, and we should try to keep it that way,” he said.
He cautioned against encroachment on wetlands and water bodies, saying environmental protection should accompany the country’s economic development.
The President also raised concern about the proximity of a garbage dumping site to the planned petroleum facility and called for its relocation, describing the situation as dangerous.
“We must find alternative means of dealing with waste. One of the ways is through incineration, which is also a source of electricity,” he said.
UNOC sets September 2028 commissioning target
UNOC Board Chairman Mathias Katamba described the Kampala Storage Terminal as a major milestone for Uganda’s petroleum sector and said it would contribute to positioning the country as a regional hub for petroleum products.
Katamba said UNOC had secured the required government and building permits from relevant local authorities, as well as a petroleum facility construction permit from the Ministry of Energy and Mineral Development.
He said the contract effective date for the Engineering, Procurement and Construction (EPC) works is September 18, 2026, with construction expected to begin immediately after the groundbreaking ceremony and laying of the foundation stone.
Detailed engineering is expected to be completed by March 2027, while commissioning is scheduled within 24 months of the contract effective date, around September 2028.
Katamba said the project follows studies and planning that culminated in the Kampala Storage Terminal Master Plan in 2017.
He said the increased storage capacity would support the establishment of strategic national petroleum stocks and strengthen security of supply for refined petroleum products.
Government calls for road and railway links
The Minister of Energy and Mineral Development, Dr Monica Musenero, said the facility would serve as a strategic storage hub and play a key role in strengthening Uganda’s petroleum supply chain.
She welcomed UNOC’s commitment to complete the project within 24 months and pledged the Ministry’s support towards its implementation.
Musenero, however, called for improved road connectivity to the terminal, particularly the link to the Mpigi Expressway.
She also called for railway connectivity to be developed to facilitate the transportation of petroleum products.
The Permanent Secretary in the Ministry of Energy and Mineral Development, Eng. Irene Batebe, said the terminal would strengthen Uganda’s capacity to maintain strategic petroleum stocks and respond to potential disruptions in fuel supply.
She said the project would significantly increase Uganda’s existing petroleum storage capacity.
Batebe added that the government is also working to expand other storage facilities, including the Jinja Storage Terminal, as part of broader efforts to strengthen petroleum supply and security.
Once completed, the Kampala Storage Terminal is expected to increase Uganda’s capacity to hold strategic petroleum reserves and distribute refined petroleum products to domestic and regional markets.