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AfrElec INFRASTRUCTURE AfrElec
Kenya completes first berth at Lamu Port
KENYA
THE Lamu Port South Sudan Ethiopia Transport (LAPSSET) Corridor Development Authority (LCDA) has announced the completion of the rst of the port’s 22 planned berths. Making the statement via its Facebook page, the LCDA said that dredging had begun in December 2016 and that the second and third berths would be com- pleted by December 2020.
Downstream MEA (DMEA)understands that the budget for the first three berths was $480mn, while the full development is antic- ipated costing KES2tn ($19.35bn), with the remaining 29 to be built by private sector. Once complete, Lamu is set to be the largest deep sea port in East Africa, o ering the region’s highest rates of transhipment. e berths will each have a 400 metres quay and a depth of 17.5-18 metres, with the 22 covering 6 km of coastline.
e broader infrastructure project comprises a re ned fuel pipeline, a crude oil pipeline, a sea port, roads, airports, a railway and resort cities.
The development at the port follows the announcement in late July that Kenya’s National Lands Commission (NLC) had begun surveying the route of the Lokichar-Lamu pipeline follow- ing the completion of front-end engineering design (FEED) on the project.
e $2bn Lokichar to Lamu crude oil pipe- line 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 oil is expected to flow through the Lokichar-Lamu conduit by 2021/2022 at 60,000- 80,000 barrels per day, while Kenya and Ethiopia have signed agreement for development of a fuel line from Lamu to Addis Ababa. ere had been talk of building an oil re nery either at Isiolo in the centre of the country or at Lamu. In January, LCDA said that a 125,000 bpd facility would cost $2.8bn, however, authorities have since ruled out building a new re nery on the grounds that such project would be uneconomic at a capacity of less than 400,000 bpd. At any rate, the gures quotes appear ambitious, with the 60,000 bpd facility being built at Hoima in uganda anticipated to cost around $4bn. Kenya has already su ered a signi cant re ning setback in recent years, with the the former 35,000 bpd Kenya Petroleum Re neries Ltd (KPRL) facility at Changamwe closing in late 2013. e closure followed the withdrawal of foreign partner Essar Oil of India, having deemed a promised upgrade and expan- sion 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, includ- ing 254mn litres for re ned products and 233mn litres (1.47mn barrels) for crude oil.
PERFORMANCE
Kenya becomes an oil exporter
KENYA
KENYAN President Uhuru Kenyatta revealed last week that the country had become an exporter of crude oil.
Kenyatta told members of his cabinet in a meeting on August 1 that Kenya had sold its rst batch of crude. “We are now an oil exporter. Our rst deal was concluded this a ernoon with 200,000 barrels [valued] at a price of $12mn,” he was quoted as saying in a government press release.
As of press time, Kenyan officials had not identified the buyer of the oil. Presidential spokesperson Kanze Dena declined to com- ment.“ osedetailsarenotout,”sheremarked.
The export shipment consisted of liquid hydrocarbons that Tullow Oil had extracted from the 10BB and 13T elds in the Turkana region and transported to the port of Mombasa by truck. e UK-listed company began moving the crude in early 2019 at the rate of 600 barrels
per day but pushed delivery volumes up to 2,000 bpd in May. It said in a regulatory ling dated July 24 that it had already sent more than 200,000 barrels to Mombasa and expected to sell and li the cargo before the end of September.
Tullow discovered commercially viable deposits of oil at its Kenyan elds in 2012 and intends to begin regular commercial production there in the second half of 2023. but the company has already achieved rst oil under a programme known as the Early Oil Pilot Scheme (EOPS). It is now testing the market’s response to this new stream of crude, which is low in sulphur.
Kenyatta said last week that he hoped Kenya would reap the rewards of its entry into the oil export business. “I think we have started the journey and it is up to us to ensure that those resources are put to the best use to make our country both prosperous and to ensure we elim- inate poverty,” he stated.
Week 32 14•August•2019 w w w . N E W S B A S E . c o m P7
