Page 10 - DMEA Week 41 2022

DMEA PIPELINES DMEA

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

REFINING & FUELS
Iraq will cut refinery runs to comply with

OPEC+ production quotas, OPEC rep says

MIDDLE EAST IRAQ has decided to carve out a path toward
compliance with OPEC+ production targets
through the downstream sector rather than
the upstream sector in November, according
to Mohammad Saadoun Mohsen, the country’s
OPEC representative.
Mohsen revealed details of the country’s
plan to Argus Media on October 11, explain-
ing that Iraq would reduce domestic refinery
throughput rather than cut production in order
to comply with its OPEC+ quota for the month
of November.
He indicated that Baghdad had already made
plans to head off potential fuel shortages, saying
that the country would import refined fuels if
necessary to meet local demand.
“To bring down our production to match our
quota in November, we will reduce our refinery
runs internally,” he said to Argus Media. “And if Iraq’s newest refinery is a 140,000 bpd plant in Karbala (Photo: Stopson Italiana)
we need to match domestic [petroleum product]
needs, especially for gasoline or gasoil, we will be several days after the OPEC+ group unveiled its
increasing our import level of such products.” new production targets for November. The new
He added: “Our plan is to keep our crude schedule sets Iraq’s quota at 4.43mn barrels per
export levels as is.” day of oil next month, down from 4.65mn bpd
The OPEC representative was speaking in October and 4.66mn bpd in September.

P10 www. NEWSBASE .com Week 41 13•October•2022