Uganda advances refinery plans with $250 million fuel storage terminal

Uganda has broken ground on a $250 million fuel storage terminal in Mpigi District, advancing plans to expand petroleum infrastructure and strengthen fuel security ahead of a planned $4 billion refinery. 

The project is designed to increase strategic reserves while improving the flow of refined products to Uganda and neighboring regional markets.

The 320 million-liter Kampala Storage Terminal is being developed by Uganda National Oil Co. on 300 acres and will add substantial capacity to the country’s existing fuel network. 

The facility is expected to support domestic demand, provide a buffer against supply disruptions and create more flexibility as Uganda develops its petroleum industry.

The terminal will form part of the infrastructure supporting Uganda’s planned 60,000-barrel-a-day refinery, with refined products expected to travel through a 211-kilometer pipeline from Kabaale in Hoima to the facility near Kampala. The project follows years of planning that produced the Kampala Storage Terminal Master Plan in 2017.

Capacity for a growing market

Uganda currently has an estimated 160 million liters of petroleum storage capacity. About 30 million liters are located at Jinja, while 70 million liters are held at the privately owned Mahathi Infra Ltd. terminal in Kawuku near Entebbe. Other private-sector fuel companies operate the remaining roughly 60 million liters.

Mathias Katamba, chairman of the UNOC board, said construction will begin immediately, with commissioning targeted for September 2028. He said the company has secured the required government and building approvals, including a petroleum facility construction permit from the Ministry of Energy and Mineral Development.

The storage project is moving ahead while the refinery remains in development, giving Uganda an immediate use for the new capacity. Until domestic refining begins, the terminal can handle imported petroleum products and provide additional space for strategic reserves, potentially reducing pressure on the country’s existing storage network.

A buffer against disruptions

President Yoweri Museveni presided over the groundbreaking and said the facility would help reduce Uganda’s exposure to supply disruptions and strengthen control over the fuel supply chain. His comments underscore the government’s push to build more domestic petroleum infrastructure as the country prepares for a larger role in oil and gas.

Museveni recalled that Uganda had previously relied on middlemen in Kenya to source petroleum products, which he said contributed to higher costs. 

He also praised Vitol Bahrain for supporting the country’s fuel supply chain, including credit arrangements that allow petroleum products to be delivered before the government makes payment.

With construction now underway, the terminal becomes a key piece of Uganda’s broader petroleum infrastructure plans. 

Its scale would more than double the country’s current estimated storage capacity, while the planned refinery and pipeline would eventually connect domestic processing with a larger distribution network serving Uganda and potentially neighboring markets.