Lamu port set to be a growth catalyst

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.