PETROLEUM (REFINING, CONVERSION, TRANSMISSION AND MIDSTREAM STORAGE) ACT.

(a) establishing an effective legal framework to ensure that midstream operations in Uganda are carried out in a sustainable manner that guarantees optimum benefits for all Ugandans both the present and future generations;

(b) enabling the development of petroleum refining, gas conversion, pipelines, transmission pipelines and midstream storage facilities;

(d) regulating the planning, preparation, licensing, installation and maintenance of facilities for midstream operations;

(e) providing for the security of midstream operations;

(f) promoting equitable access to facilities for midstream operations;

(g) ensuring public safety and protection of public health and the environment in relation to midstream operations; and

(h) promoting state participation and national content in midstream operations.

2. Interpretation.

(1) In this Act, unless the context otherwise requires—

"Act" means the Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act;

"agreement" means an agreement entered into by an authorised Government authority with a person or entity in accordance with this Act for purposes of regulating the terms and conditions of midstream operations;

"Authority" means the Petroleum Authority of Uganda established under the Petroleum (Exploration, Development and Production) Act;

"authorised officer" means an officer or other person acting under the authority of the Minister or the Authority under this Act;

"authorised person" means a person authorised to carry out midstream operations under this Act;

"best petroleum industry practices" means the use of what is accepted to be the best available practices that are generally accepted as good, safe, transparent and efficient in carrying out midstream operations and that can be applied globally under similar circumstances;

"code of practice" means a code of practice issued by the Minister under section 96;

"conversion" means changing the natural gas component, without altering the molecular structure of the natural gas entered into the process through the use of pressure or temperature;

"crude oil" means naturally occurring, flammable liquid consisting of a mixture of hydrocarbons and other organic compounds that are found beneath the earth's surface;

"currency point" has the value assigned to it in the Schedule;

"facility" means any plant, structure, device or other associated equipment or infrastructure used for midstream operations;

"flaring" means combustion of hydrocarbons without application of the resulting heat or gases for any useful purpose;

"gas venting" means the release of gas to the atmosphere;

"hydrocarbons" means a naturally occurring organic chemical compound or a mixture of such compounds made of hydrogen and carbon, generated in the subsurface under the influence of temperature;

"land owner" means a person who holds or occupies land in accordance with the Land Act;

"licence" means a licence issued under this Act;

"licensee" means a person to whom a licence is granted under this Act;

"midstream operations" means planning, preparation, installation and execution of operations related to refining, conversion, transmission and storage of petroleum products, including cessation of operations and decommissioning of facilities;

"midstream storage" means the storage of petroleum commodities or petroleum products at a facility for the purposes of refining, conversion or transmission;

"Minister" means the Minister responsible for petroleum activities under this Act;

"natural gas" means all petroleum which is in a gaseous state at 15°c atmospheric pressure, including wet gas, dry gas and residue gas remaining after the recovery of liquid hydrocarbons;

"NEMA" means the National Environment Management Authority;

"operator" means a licensee or any other entity executing on behalf of one or several licensees, the day-to-day management of midstream operations;

"petroleum" means—

(a) any naturally occurring hydrocarbons, whether in gaseous, liquid or solid state;

(b) any naturally occurring mixture of hydrocarbons, whether in a gaseous, liquid or solid state; or

(c) any naturally occurring mixture of one or more hydrocarbons, whether in a gaseous, liquid or solid state and any other substances and includes any petroleum as defined by paragraphs (a), (b) or this paragraph that has been returned to a natural reservoir, but does not include coal, shale, or any substance that may be extracted from coal or shale;

"petroleum activity" means midstream operations;

"petroleum commodities" means produced petroleum which is marketable for sale, can be used as a feedstock for refining or conversion to petroleum products or direct consumption, including energy production;

"petroleum pipeline" means a pipeline used to transport petroleum but excludes a pipeline located on the premises of—

(a) a manufacturer of petroleum products;

(b) a retailer of petroleum products; or

"petroleum products" means all products resulting from refining or conversion of petroleum commodities;

"pollution" means any direct or indirect alteration of the physical, thermal, chemical or biological properties of any part of the environment by discharging, emitting or depositing wastes so as to affect any beneficial use adversely, to cause a condition which is hazardous or potentially hazardous to land, public health, safety or welfare; or to fauna and flora, or to cause a contravention of any condition, limitation or restriction which is subject to a licence under this Act;

"pollution damage" means damage or loss caused by pollution as a consequence of effluence or discharge of any substance from a facility;

"refining" means the transformation of crude oil into finished or partly finished petroleum products using different processes of distillation, cracking and reforming or other methods of altering the molecular structure of the crude oil;

"regulations" means regulations made under section 95;

"standards" means standards, specifications and codes of practice which apply to the operation, use, construction, decommissioning and disposal of facilities required for the purpose of carrying out midstream operations including standards for emissions, company standards, compulsory standard specifications, internal standards or national standards issued under the National Bureau of Standards Act but excludes standards on quality of petroleum products for the market;

"tariff" means a written statement of rates, terms and conditions for services relating to midstream operations;

"transmission" means transportation of petroleum products but not for distribution to consumers or retailers or transportation of petroleum commodities through pipelines, including transit pipelines and pipelines originating from outside Uganda connected to and with its inlet or outlet flange at a refinery or gas conversion facility in Uganda; and

"waste" includes any matter prescribed to be waste and any matter, whether liquid, solid, gaseous or radioactive, which is discharged, emitted or deposited in the environment in such volume, composition or manner as to cause an alteration of the environment.

3. Compliance with environmental principles.

(1) A licensee and also a person who exercises or performs functions, duties or powers under this Act in relation to midstream operations shall take into account, and comply with the environmental principles prescribed by the National Environment Act and other applicable laws.

(2) A licensee shall ensure that the management of transportation, storage, treatment or disposal of waste arising out of midstream operations is carried out in accordance with the environmental principles and safeguards prescribed under the National Environment Act and other laws applicable.

(3) A licensee shall contract a separate entity to manage the transportation, storage, treatment or disposal of waste arising out of midstream operations.

(4) For the avoidance of doubt, the licensee shall remain responsible for the operations of the entity referred to under subsection (3).

(5) The National Environment Management Authority, in consultation with the Authority, may grant a licence for the management of transportation, storage, treatment or disposal of waste arising out of midstream operations to an entity contracted by a licensee under subsection (3), on terms and conditions prescribed in the licence.

(6) A person contracted by the licensee under subsection (3) shall not carry out those activities without a licence issued by the National Environment Management Authority.

(7) A person who carries on the management of the transportation, storage, treatment or disposal of waste arising out of midstream operations without a licence commits an offence and on conviction is liable to a fine not exceeding 5,000 currency points or imprisonment not exceeding 10 years or both.

(8) NEMA shall make regulations concerning the management of the transportation, storage, treatment and disposal of waste arising out of midstream operations.

(9) Without prejudice to the general effect of subsection (8), regulations made under this section shall prescribe, in respect of the contravention of the regulations, penalties not exceeding a fine of 5,000 currency points or imprisonment not exceeding 10 years or both; and may prescribe that the court that convicts the person shall order the forfeiture of anything used in the commission of the offence.

(10) Regulations made under subsection (8) shall be laid before Parliament.

(11) The licensee for the relevant midstream operation shall be responsible for the payment of costs to the entities referred to in subsection (3), for the management of the transportation, storage, treatment and disposal of waste arising out of midstream operations.

PART II
INSTITUTIONAL ARRANGEMENTS.

The Minister.

4. Functions of the Minister.

The Minister shall be responsible for—

(a) granting and revoking licences;

(b) initiating, developing and implementing policy concerning midstream operations;

(d) initiating regulations for midstream operations;

(e) negotiating and endorsing agreements under this Act;

(f) promoting and sustaining transparency in the midstream petroleum sector; and

(g) any other function incidental or consequential to his or her functions under this Act.

The Petroleum Authority of Uganda.

5. The Authority.

The Authority established under the Petroleum (Exploration, Development and Production) Act, shall be responsible for the functions and other activities of the Authority under this Act.

6. Functions of the Authority.

(1) The functions of the Authority under this Act are to monitor and regulate midstream operations and activities in Uganda.

(2) Without prejudice to the general effect of subsection (1), the Authority shall—

(a) monitor and regulate midstream operations;

(b) facilitate investment in midstream operations and facilities;

(d) ensure that licensees uphold laws, regulations, rules and contract terms;

(e) administer petroleum agreements and contracts related to midstream operations;

(f) ensure optimal utilisation of existing and planned facilities;

(g) contribute to national budget planning and control;

(h) encourage, monitor, regulate, and enforce standards of operations and code of practice for midstream operations;

(i) review and approve all transmission and storage tariffs, levies and pricing frameworks of operators of transmission and storage facilities;

(k) review and approve all refining and gas conversion tariffs, levies, fees and charges;

(l) ensure and facilitate competition, access and utilisation of facilities by third parties;

(m) monitor conditions of operators and their trade practices to ensure that competition and fair practice is maintained;

(n) provide information relevant for the collection of taxes and fees from midstream operations;

(o) ensure the implementation of this Act and regulations made under the Act;

(p) review regulations and codes of practice for crude oil refining;

(q) review regulations and codes of practice for gas conversion; and

(r) perform any other function incidental or consequential to its functions under this Act,

(3) The Authority shall, to the greatest extent possible and consistent with this Act, consult and cooperate with ministries, departments and agencies of Government having duties, aims or functions related to those of the Authority.

National Oil Company.

7. The National Oil Company.

(1) The National Oil Company established under the Petroleum (Exploration, Development and Production) Act, shall be deemed to be established for purposes of this Act.

(2) The Government shall support the building of the capacity of the National Oil Company to enable it perform its role in midstream operations.

(3) The Minister may, with the approval of Cabinet, decide that the National Oil Company shall participate in midstream operations.

PART III
LICENSING.

Licensing of Midstream Operations.

8. Agreements with Government.

The Government may enter into an agreement relating to midstream operations consistent with this Act, with any person in respect to the following matters—

(a) the grant of a licence;

(b) the conditions for granting or renewing a licence;

(d) any other matter incidental or connected to the matters in paragraphs (a), (b) and (c).

9. Midstream operations requiring a licence.

(1) A person shall not construct or operate the following without a licence issued by the Minister under this Act—

(a) a facility for refining crude oil;

(b) a facility for conversion of natural gas;

(d) a midstream storage facility; or

(e) any other facility for the purpose of midstream operations subject to this Act or any regulations prescribed under this Act.

(2) A person who contravenes subsection (1) commits an offence and is liable on conviction—

(a) if an individual, to a fine not exceeding 100,000 currency points or imprisonment not exceeding 10 years or both; and

(b) if a body corporate, to a fine not exceeding 200,000 currency points.

10. Application for a licence.

(1) An application for a licence under this Act shall be made to the Minister in a manner prescribed by regulations.

(2) An application for a licence under subsection (1) may be made by two or more persons jointly and the agreement between the parties to the proposed joint operation shall be submitted together with the application.

(3) Any agreements regarding joint operations arrangement shall be made in accordance with this Act and shall be subject to approval by the Minister.

(4) An application for a licence under subsections (1) and (2) shall be in writing and shall be accompanied by a fee prescribed by regulations.

(5) Where the applicant is a licensee under the Petroleum (Exploration, Development and Production) Act, or the Petroleum Supply Act, the Minister may require the applicant to furnish additional information.

(6) An application made under subsections (1) and (2) shall contain—

(a) the name, company number if any and principal place of business of the applicant;

(b) particulars of the owner or shareholder of the applicant if the applicant is not a natural person;

(c) document demonstrating the administrative, financial and technical abilities of the applicant including, a detailed statement of the applicant's assets and liabilities signed by the applicant, or in the case of an applicant which is a company, accompanied by—

(i) copies certified by a director of the company to be true copies of the last balance sheet and of the last profit and loss account, if any, incorporating the results of the last financial year, and which have been audited by the company's auditors, including every document required by law to be annexed or attached to them;

(ii) a certified copy of the report of the auditors; and

(iii) a detailed statement of the financial resources available to the applicant to undertake the business under the licence;

(d) the feasibility and justification of the project;

(e) a description of the proposed facility to be constructed or operated, including basic designs, diagrams, feedstock and utilities where appropriate;

(f) list of process technologies and relevant licensors;

(g) a planned production or operation schedule;

(h) a maintenance plan or schedule;

(i) the planned time of commencement and completion of the project;

(j) configurations and capacities including utilities;

(k) a technical and economic description of the project including the proposed technical and financial partners;

(l) proposed feedstock supply and product evaluation scheme;

(m) proposed standardisation and quality mechanism;

(n) a general description of the type of customers to be served and the tariff or crude oil or gas policies;

(o) the plans and ability of the applicant to comply with all applicable labour, health, safety and environmental legislation;

(p) safety measures to be adopted in the course of the operations, including measures to deal with emergencies;

(q) results of assessments, including environmental impact assessments, studies or audits carried out and reports of those assessments, studies or audits;

(r) the impact of the project on public interests and possible mitigation;

(s) the applicant's proposals for the employment and training of Ugandan citizens;

(t) the applicant's proposals with respect to the procurement of goods and service

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