Kenya's New Sh40bn Oil Terminal Nears Completion

Posted on : Wednesday , 8th December 2021

Kenya will quadruple its capacity to handle transit petroleum products to Uganda, Rwanda, and Burundi when the new Kipevu Oil Terminal in Mombasa is completed in January 2022, up from 35,000 tonnes now.

The new terminal, which cost $385 million, can handle up to four vessels at once, whereas the old terminal could only handle one.

The port is projected to lower the cost of petroleum products by lowering demurrage, or the extra time required to load and unload goods, which is a major contributor to the region's high oil prices.

A dry run test has been scheduled for December by the Kenya Ports Authority (KPA), which will operate the terminal. The port can handle ships with a dead weight tonnage of 200,000 tonnes and is equipped with a liquefied petroleum gas (LPG) line to help Kenya's gas supply remain stable.

According to KPA, faster loading will result in lower LPG pricing.Faster loading, according to KPA, will result in cheaper LPG prices.

The East African has established KPC is currently in talks with Kenya’s Ministry of Energy to put up a dedicated LPG storage facility with an initial capacity of 25,000 tones.“The construction of the KOT (Kipevu Oil Terminal) to support the energy sector has made significant progress and upon completion by the end of this year, we shall have terminals consisting of four berths capable to berthing four vessels to benefit from economies of scale and reduce fee charged for waiting vessels,” said acting KPA managing director John Mwangemi.

The facility was built by the China Communications Construction Company to supplement the current 50-year-old Kipevu Oil Terminal.

The new terminal will have both subsea and land-based pipelines connecting it to the storage facilities in Kipevu, and the capacity to handle crude oil and heavy fuel oil as well as three types of white oil products — DPK-aviation fuel, AGO-Diesel and PMS-Petrol.

KPC is angling to take over operations at the new terminal and at Kenya Petroleum Refineries.

KPC infrastructure development general manager David Muriuki said; “We expect tender for the construction of storage facility is expected to be ready within three months whereas facility is set to be completed within three years.”