Uganda breaks ground on 320mn-litre Kampala petroleum storage terminal

Uganda has broken ground on a 320mn-litre petroleum storage terminal in Mpigi District, with official estimates putting the project cost at $250mn–$310mn; available government material does not explain the discrepancy.

President Yoweri Museveni presided over the groundbreaking of the Kampala Storage Terminal (KST) at Namwabula in Mpigi District on September 17. The state-owned Uganda National Oil Company (UNOC) is developing the project on about 300 acres of land.

Uganda currently has an estimated petroleum storage capacity of 160mn litres, according to the Office of the President. This comprises 30mn litres at the Jinja Storage Terminal, 70mn litres at the Mahathi facility in Kawuku and about 60mn litres operated by private-sector fuel companies. KST would add another 320mn litres, potentially lifting aggregate national capacity to around 480mn litres.

At current demand of about 240mn litres a month, average consumption is roughly 8mn litres a day. On that basis, Uganda’s existing storage capacity is equivalent to about 20 days of consumption, KST alone to about 40 days and combined national capacity to about 60 days if existing facilities remain available.

These figures represent potential storage capacity rather than actual strategic reserves, which would depend on how much fuel is held and how much capacity is reserved for emergency stocks. Greater storage would improve resilience to supply disruptions but would not by itself lower pump prices, which remain exposed to international oil prices, exchange rates, taxes, transport costs and market competition, The Independent noted.

Even if all existing capacity remained available, the resulting 60 days of nominal storage would remain below the 90–120 days of strategic reserves advocated by Economic Policy Research Centre researcher Eric Mudoko. At current consumption, that would imply roughly 720mn–960mn litres of reserve capacity. The government said KST would support strategic petroleum reserves, reduce exposure to supply disruptions and improve distribution to domestic and regional markets. Uganda imports approximately 95% of its petroleum products, according to UNOC.

Construction, financing and ownership

The groundbreaking took place on September 17, a day before the engineering, procurement and construction (EPC) contract formally took effect on September 18. UNOC said the necessary government, local-authority and petroleum-facility construction permits were in place, with site works expected to begin immediately. Detailed engineering is scheduled for completion by March 2027 and commissioning within 24 months of the contract taking effect, around September 2028.

UNOC has secured access to a financing package of up to $2bn over seven years from Vitol Bahrain for a portfolio of petroleum infrastructure projects that includes KST. UNOC has not publicly disclosed how much of the facility is specifically allocated to KST or the precise financing structure for the terminal.

The Independent has reported that UNOC will own 100% of KST, while earlier shareholder approvals envisaged UNOC holding at least 51% alongside strategic partners. The available project documentation does not clearly explain when or how the ownership model changed.

Energy and Mineral Development Minister Monica Musenero said improved road access would be required, particularly a connection to the Mpigi Expressway, alongside future railway connectivity.

Links to refinery and regional fuel network

The terminal is also intended to form part of Uganda’s planned downstream oil network. The Energy Ministry has said KST will be connected to the proposed refinery in Hoima through a refined-products pipeline, allowing domestically processed fuel to be transported to the storage and distribution hub.

As IntelliNews reported in August 2025, the $4bn Hoima refinery project includes a 211-km multi-product pipeline to KST at Namwabula. The planned 60,000 barrels per day (bpd) refinery is intended to reduce Uganda’s dependence on imported petroleum products and supply domestic and regional markets.

Separately, KST could eventually receive imported products through the proposed Eldoret-Kampala refined-products pipeline from Kenya. Independent industry analysis has stressed that additional storage will only strengthen fuel security if it is integrated with procurement and distribution infrastructure.

Andrew Mwangura, a Mombasa-based maritime and energy analyst, said on September 20 that KST and the proposed Eldoret-Kampala pipeline could reduce logistics costs and improve supply resilience, but warned that financing and execution remained central uncertainties after decades of stop-start planning on the cross-border project. He said the terminal and pipeline would need to be developed as complementary rather than sequential projects.