Page 8 - AfrOil Week 41 2022

AfrOil PIPELINES & TRANSPORT AfrOil

Ruto did not specify the exact extent to which of cooking gas as it does the price of gasoline,
energy prices might sink once Kenya began diesel and other petroleum products.
importing Tanzanian gas. He did note that the These costs have arisen because of Kenya’s
first phase of the future pipeline would follow a dependence on LPG imports – and specifically
600-km route from the Mtwara gas-processing on LPG imported via Dar es Salaam and then
plant, which will be built about 396 km south moved overland into Kenya. Officials in Nairobi
of Dar es Salaam on Tanzania’s coast, to Kenya’s are hoping that the pipeline will make Mombasa
main Indian Ocean port of Mombasa. Later, he a more attractive destination for LPG traders so
said, the link will be extended inland to the Ken- that Kenya can import LPG directly, thereby
yan capital, Nairobi. avoiding markups. To this end, it has announced
The pipeline project is expected to carry a plans to build a 25,000-tonne LPG storage depot
price tag of about KES132bn ($1.1bn). It will at Mombasa.
make use of gas from Tanzania’s offshore fields, State-owned Kenya Pipeline Co. (KPC) has
which are believed to hold a total of 57 trillion gone further. Earlier this year, it issued tender
cubic feet (1.614 trillion cubic metres). documents detailing plans for a facility capa-
Ruto’s predecessor Uhuru Kenyatta signed a ble of loading 500 tonnes per day of LPG onto
memorandum of understanding (MoU) on the trucks for local delivery. ™
gas pipeline project with Suluhu in May 2021.
Since then, domestic prices for LPG, which
is produced via natural gas processing, have
increased significantly. This is partly the result
of the general rise in global energy prices, but it
also stems from the Kenyan government’s deci-
sion to start charging VAT on the fuel once again
in July 2021.
Nairobi subsequently cut the VAT rate from
16% to 8% in response to widespread complaints
from Kenyan consumers, who have experienced
considerable hardships this year as a result of
higher food and fuel prices. However, LPG
prices have remained high, and some members
of the public are blaming fuel marketers and
middlemen for passing on their costs, since the
Kenyan government does not regulate the price Ruto (L) and Suluhu (R) met on October 10 (Photo: Twitter/@StateHouseKenya)

INVESTMENT
BP, Kosmos gain more gas for LNG through

deal with Mauritania on offshore Block C

MAURITANIA BP (UK) and Kosmos Energy (US) appear to first half of 2025, it reported.
have expanded their resource base for LNG pro- The block’s gas resources are large enough to
duction offshore West Africa through the sign- support a profitable LNG project that will trans-
ing of a preliminary deal for Block C8, a natural form Mauritania’s economy by generating large
gas-bearing licence area offshore Mauritania, export revenues, the statement added.
with the country’s Ministry of Petroleum, Mines It reported that BP had pledged to work with
and Energy. the Ministry of Petroleum, Mines and Energy to
The ministry did not reveal the exact terms of draw up a plan for maximising local content in
the agreement, but it announced the signing of a the project and noted that the national oil com-
document on October 11. In a statement, it said pany (NOC) SMHPH would retain a 25% equity
the parties had finalised a production-sharing stake in the block.
contract (PSC) with a term of 30 months fol- The deal will let BP and Kosmos extend their
lowing the expiration of their exploration deal footprint in the MSGBC basin offshore West
in June of this year. Africa. Block C8 lies directly north of Greater
BP and Kosmos are expected to use this Tortue/Ahmeyim (GTA), a large gas-bearing
30-month period to carry out and complete site onthe maritime border between Mauritania
engineering studies of C8 and then make a final and Senegal where the partners plan to launch
investment decision (FID) on the project in the LNG production and exports next year.

P8 www. NEWSBASE .com Week 41 13•October•2022