Page 12 - DMEA Week 30

DMEA PiPelines DMEA
Kenya prepares for pipe laying
AfriCA
KENYA’S National Lands Commission (NLC) has begun surveying the route of the Lokich- ar-Lamu pipeline following the completion of front-end engineering design (FEED) on the project. e $2bn Lokichar to Lamu crude oil pipeline is designed to heat and transport waxy crude from oil elds in the South Lokichar Basin in the north-west of the country to the port of Lamu on the Indian Ocean for export. UK-based Wood was awarded the FEED contract in May 2018. First commercial oil production is cur- rently anticipated in 2023 following the maiden delivery of crude to storage tanks at Changa- mwe near Nairobi in July 2018 under the Early Oil Pilot Scheme (EOPS), led by UK-based upstream operator Tullow Oil.
Kenya had intended to begin commercial exports of 60,000-80,000 barrels per day (bpd) of oil in 2022, with a nal investment decision (FID) to be signed in late 2019.
e upstream element of the development has su ered delays, with the start-up date hav- ing been pushed back several times, and an FID is not anticipated until mid-2020. e progress of the project was in part held up by uncertainty about the route to market. Plans to collaborate on a pipeline unitising ows from that country’s Lake Albert elds ultimately proved unsuccess- ful, with Kampala electing to pipe its oil via Tan- zania’s port of Tanga.
e EOPS, which calls for an initial 2,000 bpd of crude to be sent to Changamwe for stor- age before export from Mombasa, is due to end when commercial-scale production comes on stream. Changamwe is the site of the former 35,000 bpd Kenya Petroleum Refineries Ltd
(KPRL) facility, which closed in late 2013 follow- ing the withdrawal of foreign partner Essar Oil of India, having deemed a promised upgrade and expansion project uneconomic. is followed heavily indebted KPRL being unable to nance further crude oil purchases.
Nairobi opted to convert the site into a storage facility and allowed Kenya Pipeline Co. (KPC) to lease the assets for a three-year term, scheduled to expire in March 2020. KPC operates existing fuel tanks with capacity of 320mn litres at the port of Mombasa. KPRL’s facilities comprise 45 tanks with total capacity of 484mn litres – including 254mn litres for re ned products and 233mn litres (1.47mn barrels) for crude oil.
e change of management was followed by the investment of KES1.1bn ($11mn) to enable some of the tanks to store the rst of the waxy crude oil produced under the EOPS.
Kenya has ruled out building a new re nery on the grounds that such project would be une- conomic at a capacity of less than 400,000 bpd.™
DP World plans capacity expansion at Turkey’s Yarimca
middle eAst
PORT operator DP World intends to increase its capacity at Turkey’s western Yarimca port by 30% with a $50mn investment to be made by the second quarter of 2020, its Turkish unit chief executive Kris Adams said.
Adams also said that DP World was in the market for the acquisition of more Turkish assets but was waiting for the right price.
“We would be willing to look at acquisitions in the Turkish market if opportunities arise. ere are local players that are willing to exit the industry, but they are still working with very high multiples. at just doesn’t work in today’s environment,” he said.
DP World Yarimca is one of the biggest con- tainer terminals in Turkey with a 1.3mn TEU capacity. It is located in the western industrial province of Kocaeli on Izmit Bay, taking up land space of 46 hectares.
e port employs 500 workers and accord- ing to the company’s website it is equipped with the latest in technology, even when compared to other DP World terminals worldwide.
DP World has already invested some $500mn in the Yarimca terminal.
DP World’s portfolio spans across 40 coun- tries on six continents, with 80 marine and inland terminals operated.™
terminAls & shiPPinG
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w w w . N E W S B A S E . c o m Week 30 01•August•2019