Ibrahim Kasita
13 May 2008
Kampala — TULLOW Oil, the firm exploring for oil in the Albertine Graben in western region, has applied to the Electricity Regulatory Authority (ERA) for an electricity generation license.
ERA in a media advertisement on Monday said Tullow also intends to develop an extension to the 132kV transmission system from Mputa to Nkenda substation.
"Tullow intends to generate about 57 mega watts of electricity utilising heavy-fuel oil. It will use seven-megawatts for its oil field development, while the balance of 50 mega watt capacity will be absorbed onto the national grid system," ERA's advertisement read.
Tullow has agreed with Norwegian power firm Jacobsen Elektro to build and install a heavy-fuel thermal plant in Hoima.
The oil exploration firm will focus on the production of oil and gas in the Lake Albert region, while Jacobsen will handle the power generation and transmission system.
Tullow intends to build a 4,000-barrel-a-day mini-refinery and a power plant when it begins producing oil next year.
The power will be fed to the national grid. This is part of the agreement with the Government to build a mini-refinery in an early production scheme that will enable the construction of the 100 mega watts plant to tackle load-shedding.
Jacobsen is already installing a similar plant with the capacity of 50 mega watts at Namanve expected to be online by August. The firm signed operation and maintenance agreements with Watsila, a Finish firm, after sealing a power purchase agreement with the Uganda Electricity Transmission Company.
Tullow plans to invest over $200m (about sh336b) in its exploration activities in Uganda this year.
This expenditure will be focused on onshore and offshore drilling, seismic surveys and the anticipated sanction of an early production scheme.
The programme is also targeting significant oil resources with the ultimate aim of exceeding the threshold required for full development and exportation to international market.
Another similar plant with a capacity of 10 mega watts will be built by Electro-Maxx, a local independent power producer, in Tororo. Initial power is expected in June.
Aggreko International is also in the process of installing a 50 mega watt thermal plant at Mutundwe, which is expected online by June.
Uganda's electricity supply is 255 mega watts but the country requires about 380 mega watts for the economy to grow at more than 6% per annum.
About 145 mega watts are generated at the two hydropower stations in Jinja, while less than 100 mega watts are generated at Kiira and Lugogo thermal power stations, leading to a deficit of 125 mega watts.
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