A second oil refinery with a capacity to process 120,000 barrels of oil per day will be constructed in Lamu at the Kenya Coast, to meet the growing demand for oil products in the region.

Dr Mutule Kilonzo, the lead consultant of the Inter-Ministerial Committee on the Second Transport corridor, said the refinery will be built at the new port of Lamu whose construction is expected to begin next year.

It will largely refine crude oil from Southern Sudan and other parts of the world to serve the larger East African market.

“It will be set up as a merchant refinery that essentially entails being able to refine crude oil for any new comer for a fee,” Dr Kilonzo said.

“Southern Sudan does not wish to continue its dependence on the North for obvious reasons. In principle, an alternative oil pipeline is needed and Kenya will be the place to put up that pipeline,” said Dr Kilonzo.

Southern Sudan currently exports its oil through a 1,600-kilometres pipeline connecting its oilfields to the Red Sea at Port Sudan, while in comparison, the proposed Lamu to Juba pipeline will be 1,500km.

It is therefore proposed that the pipeline be constructed alongside a railway line linking the Southern Sudan oilfields to the proposed Lamu Free Port.

The entire second transport corridor — of a super railway line stretching from Lamu, passing through Garissa, Isiolo, Mararal, Lodwar, and Lokichoggio and branching from Isiolo to Juba, Addis Ababa and Nairobi — dubbed ROOLA, has other components to be implemented jointly with the pipeline, the railway line and the port.

Among these are a super highway that will connect Lamu to Addis Ababa and Juba in Southern Sudan.

A fibre optic infrastructure to link the entire corridor will also be laid and international airports constructed in Lamu, Isiolo and Lokichoggio, three important centers along the new transport corridor.

The three centers will also be made resort cities, Dr Kilonzo said.

According to the director of Shipping and Maritime Affairs at Kenya’s Ministry of Transport Peter Thuo, the government has started the tendering process for the project, which is expected to cost $16 billion.

“We are currently reviewing international and local bid that were submitted in the expression-of-interest stage to carry out feasibility studies on the project,” Mr Thuo said.

The shortlisted bidders will be required to submit detailed bids for provision of financial and technical services.

The project will be implemented through a public private partnership according to Mr Thuo. Once the feasibility studies are complete, said Mr Thuo, it will be easy to seek implementing partners.

According to Dr Kilonzo, partners will be sought based on specific components of the project.

Although the government of Qatar had shown AN interest in funding the construction of the Lamu port in return for 100,000 acres of land at the Tana Delta to grow fruits and vegetables, Kenya’s Minister for Transport Chirau Ali Mwakwere early this year said that other options were also being explored after the move drew mixed reactions, adding however that the government was keen on implementing the project.

“Some investors may only be interested in financing one component of the project, like say the railway line,” Dr Kilonzo said.

He said that various countries among them India, the United Arab Emirates, the US and Qatar have already shown interest in financing the project which was first mooted in 1975. The railway line has already been incorporated in the East African Railway master plan,” Dr Kilonzo said.

The Lamu refinery will refine some of the crude oil for the sub-regional market while the rest will be exported. Sophisticated cargo handling equipments will also be put up to facilitate tanker loading in the high seas.

The port plan also features a second pipeline to be constructed from the Lamu refinery to Addis Ababa to deliver refined oil products to Ethiopia.

A branch of a pipeline is also being considered to join Lamu to the existing Mombasa-Kampala pipeline to transport oil products to Uganda.

“But this will be decided once the planned pipelines are complete,” said Dr Kilonzo.

Uganda, which is a landlocked country relying on Mombasa port, has already planned to go-ahead with the construction of a refinery for the two billion barrels of crude reserves recently found on its territory, according to Uganda’s energy minister.

Investor interest is already heating up for Uganda’s oil discoveries since explorers — Tullow Oil and Heritage Oil — discovered hydrocarbons in the Lake Albert region bordering the Democratic Republic of Congo. Kampala expects to start pumping oil from next year.

Kenya, Dr Kilonzo said, provides an ideal gateway to the sub-region with a well-developed port as well as its increasingly diversified aerodrome network.

Southern Sudan, a recent addition to the family of peaceful nations, is expected to be a huge exporter of oil, which is more economic if refined at the port of exit, Dr Kilonzo said.

The government, he said, will also commission a study soon to explore the feasibility of extending the railway line as well as the pipeline from Juba to Bangui in Central Africa and onward to Yaoundé in Cameroon.