Page 15 - DMEA Week 10 2021

DMEA PIPELINES DMEA

Kenya puts Lokichar-Lamu

pipeline back on the table

AFRICA AFTER lengthy delays, Kenya has resurrected (bpd), while Kenya and Ethiopia signed agree-
plans to develop the 892-km Lokichar-Lamu ment for development of a fuel line from Lamu
Crude Oil Pipeline (LLCOP) to take Kenya’s to Addis Ababa.
first crude from the Lokichar fields in the remote There had been talk of building an oil refin-
north-west to the port of Lamu on the Indian ery either at Isiolo in the centre of the country
Ocean. or at Lamu. In January 2019, LCDA said that a
The progress of the ambitious Lamu Port 125,000 bpd facility would cost $2.8bn; however,
South Sudan Ethiopia Transport (LAPSSET) the authorities have since ruled out building a
corridor infrastructure project, which com- new refinery on the grounds that such project
prises a refined fuel pipeline, a sea port, roads, would be uneconomic at a capacity of less than
airports, a railway, resort cities and LLCOP, has 400,000 bpd.
been slowed by civil issues and a lack of buy-in At any rate, the figures quoted appear ambi-
from the governments involved. tious, with a 60,000 bpd facility being built at
It was further delayed when the Ugandan Hoima by Uganda’s Lake Albert partners Total,
government and the companies developing its Tullow and China National Offshore Oil Corp.
Lake Albert oilfields elected to export the waxy (CNOOC) anticipated to cost around $4bn.
crude via a heated export pipeline through Tan- Kenya has already suffered a significant
zania to the port of Tanga. refining setback in recent years, with the for-
The choice of the East African Crude Oil mer 35,000 bpd Kenya Petroleum Refineries
Pipeline (EACOP) followed protracted discus- Ltd (KPRL) facility at Changamwe closing in
sions around it and two proposed routes through late 2013. The closure followed the withdrawal
Kenya. of foreign partner Essar Oil of India, having
Tanzania’s President John Magufuli offered deemed a promised upgrade and expansion
sweeteners to sway the parties away from a pro- project uneconomic.
visionally agreed LAPSSET route, including This followed heavily indebted KPRL being
a 10-year corporate income tax holiday and a unable to finance further crude oil purchases.
three-year waiver of VAT. Nairobi opted to convert the site into a storage
Work on that pipeline is due to kick off this facility and allowed Kenya Pipeline Co. (KPC) to
month ahead of completion in 2024. lease the assets for a three-year term, scheduled
Further delays came last year when the Kenya to expire in March 2020.
Defence Forces (KDF) demanded that the route KPC operates existing fuel tanks with a total
be altered to avoid encroaching on its lands. capacity of 320mn litres at the port of Mombasa.
Following a meeting between the KDF and the KPRL’s facilities comprise 45 tanks with total
LAPSSET Corridor Development Authority capacity of 484mn litres, including 254mn litres
(LCDA), the project developers – the Kenyan for refined products and 233mn litres (1.47mn
government, London-listed Tullow Oil, France’s barrels) for crude oil.™
Total and independent Africa Oil Corp. – made
a revision to the route.
The re-envisaged pipeline will run through
Kenya’s Turkana, Samburu, Isiolo, Meru, Garissa
and Lamu counties. An addendum in the envi-
ronmental and social impact assessment (ESIA)
notes: “The pipeline route realignment in Gar-
issa County deviates from the original line … the
new pipeline alignment moves approximately 3
km to the north of the original route and results
in the shortening of the overall pipeline length by
approximately 1 km.”
With the issue appearing to be concluded, the
National Environmental Management Author-
ity (NEMA) issued an invitation for public par-
ticipation in the project this week.
It will join Lamu to Nakodok on the border
with South Sudan and have arterial branches to
Moyale from Garissa.
First oil had been anticipated to flow through
the Lokichar-Lamu conduit by late this year/
early 2022 at 60,000-80,000 barrels per day

Week 10 11•March•2021 www. NEWSBASE .com P15