Shearman And Sterling

News April 12, 2018

Project Framework Agreement Signed for $3 Billion Greenfield Refinery Project in Uganda

Shearman & Sterling was appointed by managing investor Yaatra Ventures to represent the Albertine Graben Refinery Consortium (AGRC) in connection with the signing of an exclusive Project Framework Agreement for the development, financing, construction, operation and maintenance of a greenfield refinery project in Hoima District, Uganda (the Refinery Project).

AGRC is an American-led private sector consortium comprising Baker Hughes General Electric (BHGE) – acting through its subsidiary Nuovo Pignone International Srl; U.S.-based Africa-focused infrastructure and developer Yaatra Africa; LionWorks Group, an Africa-focused infrastructure investor that will provide additional financing expertise and investment; and Italian EPC contractor Saipem SpA that will design and construct the Refinery Project.

The Refinery Project comprises the development, financing, construction and operation of: (i) a 60,000 barrels-per-day oil refinery; (ii) a 211 kilometer refined products pipeline; and (iii) relevant on-site and downstream refined product storage facilities. The Refinery Project will rely on the supply of recently discovered crude oil from Uganda’s Albertine Graben and will produce refined products (including petrol, liquefied petroleum gas, diesel and kerosene) for supply to Uganda and other East African countries, spurring economic growth and the development of new industries across a region that has otherwise relied on imported refined products delivered by truck from East Africa ports.

The Refinery Project is expected to create, directly and indirectly, an estimated 40,000-50,000 jobs in Uganda and enable the transfer of both skills and technology to the Ugandan people. It is expected that the Refinery Project will improve productivity in Uganda as well as have a positive impact on Uganda's balance of trade and payments, making the Refinery Project a vital strategic project for Uganda and the East African region.

The Team