Completion of the new Kipevu Oil Terminal in Mombasa will see Kenya double its capacity to handle transit petroleum products to Uganda, Rwanda and Burundi starting January 2022 from the current 35,000 tonnes.
The $385 million terminal can handle up to four vessels at a time compared with the old terminal that can handle only one.
The terminal is expected to cut cost of petroleum products by reducing the cost of demurrage or the extra time taken to load and unload cargo, a big factor to the high cost of oil in the region.
The Kenya Ports Authority (KPA), who will run the terminal, have scheduled a dry run test in December. The terminal can handle vessels with a dead weight tonnage of 200,000 and has a liquefied petroleum gas (LPG) line to stabilise gas supply in Kenya.
KPA says faster loading is expected to translate to lower prices for LPG.
Lower LPG costs
According to Kenya Pipeline Company (KPC) the new facility will reduce cost of gas by 30 percent once operational.
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.”