Ugandan President Yoweri Museveni and officials attend the groundbreaking ceremony for the Kampala Storage Terminal in Mpigi District. Photo: UNOC

NNA News - Uganda has begun construction of a 320-million-litre petroleum storage terminal in Mpigi District, expanding its capacity to hold strategic fuel reserves as the country prepares for increased domestic demand and future oil production.

President Yoweri Museveni presided over the groundbreaking of the Kampala Storage Terminal (KST) at Namwabula on Thursday. The facility is being developed by the Uganda National Oil Company (UNOC) on about 300 acres and is designed to store refined petroleum products for domestic distribution and regional markets.

The project comes as Uganda seeks to reduce its exposure to disruptions along regional import routes. The country consumes about 240 million litres of petroleum products a month, according to Ugandan authorities, while existing storage capacity across government and private facilities is estimated at 160 million litres.

Museveni said expanding storage was necessary as Uganda develops its petroleum resources, but warned that the new terminal would not meet all of the country's long-term requirements. “Now that we are moving well on developing our resources, we must plan for storage,” Museveni said.

He also questioned whether 320 million litres would ultimately be sufficient for Uganda's needs, given monthly consumption and expected economic growth. “I think this here is not enough,” he said. Energy and Mineral Development Minister Monica Musenero said the terminal would provide a buffer against international supply disruptions and market shocks. “The project goes beyond increasing storage capacity. It provides Uganda with the infrastructure required to maintain strategic petroleum stocks and respond to potential supply disruptions and international market shocks,” Musenero said.

Fuel storage tanks and a petroleum tanker at a Uganda National Oil Company (UNOC) storage facility, illustrating Uganda's petroleum storage and distribution infrastructure. Photo: UNOC

The government is also upgrading the Jinja Storage Terminal from 30 million to about 40 million litres and is considering additional regional storage facilities and alternative supply routes through Lake Victoria. Musenero said the Mpigi facility would require improved road and rail connections to move petroleum products efficiently. UNOC Board Chairperson Mathias Katamba said the terminal would support strategic reserves, commercial storage and distribution while strengthening Uganda's ability to withstand interruptions along petroleum import corridors. “The expanded storage capacity will support the establishment of strategic national petroleum stocks and strengthen security of supply,” Katamba said.

The terminal is also being positioned as part of Uganda's emerging domestic petroleum infrastructure. The Energy Ministry says it will form part of a system connecting planned refining and pipeline infrastructure, including a proposed 211-kilometre multi-products pipeline from Hoima. Permanent Secretary in the Energy Ministry Irene Batebe said strategic reserves were important for protecting the economy from disruptions affecting imported fuel. “Adequate strategic reserves are essential to keep industry running, transport moving, and households supplied even when external supply chains are interrupted,” Batebe said.

The project also faces a land-use challenge. Musenero said the proximity of a waste-disposal site required proper zoning and planning around the terminal. Local reporting said the issue had raised concerns over the safety of locating major petroleum infrastructure near the disposal site. UNOC says engineering work is expected to be completed by March 2027, with commissioning targeted for around September 2028