Mahathi Uganda’s Lakeside Oil Complex Opens Next Month

(Bloomberg) -- Mahathi Infra Uganda’s $270-million lakeside logistics complex, a strategic addition to the East African nation’s oil infrastructure, is set to start operations in January.

The project is expected to help halve freight costs by moving most of the transportation of petroleum products between Kenya and Uganda from the roads to the lake, according the company’s board chairman, Michael Mukula. Shareholders in the venture include Mahathi Infra Services Pvt of India, Nairobi-based Siginon Group, an engineering firm and local company Fortune Energy.

The development bodes well with the region’s longstanding aspirations to develop transportation on Lake Victoria -- shared by Uganda, Kenya and Tanzania -- to ease transport costs. A comparable facility to the one near Kawuku town, around 14 miles south of the Ugandan capital, Kampala, has been developed in Kisumu city on the Kenyan side.

“This project is a game changer critical in petroleum logistics and will increase the reliability of supplies,” Project Manager Dinesh Donadi said in an interview. 

The 14 tanks at the facility will more than double the nation’s petroleum-storage capacity to 70 million liters of gasoline, diesel, aviation fuel and kerosene, Mukula said in a separate interview. Uganda consumes about 185 million liters of petroleum products monthly. 

Tanks, Jetty, Ships

The complex also has a jetty which stretches 256 meters into the lake, the longest in East Africa. Building of the second of four 118-meter long oil tankers is nearing completion, according to Mukula. Discussions with more than 70 oil marketers, including Vivo Energy Uganda and TotalEnergies SE’s local unit, have been concluded to take supplies from the facility, he said.

The project is also in line with landlocked-Uganda’s plans to build an oil hub with transit infrastructure to service cargo destined to other markets, including the Democratic Republic of Congo, Rwanda, Burundi and South Sudan. The nations currently receive most of the products from Kenya by road. 

The facility could also be used to transport oil out of Uganda after 2025 when planned production starts from fields developed by companies including TotalEnergies, according to Mukula.

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