Kenya has sold former oil refinery, Kenya Petroleum Refineries Limited (KPRL), to the state-owned Kenya Pipeline Company (KPC), paving the way for the facility’s conversion into a gas-to-power plant.
The transaction will enable the rehabilitation of the refinery – which has been inactive for over ten years – so that it is equipped to generate power from Liquefied Natural Gas imported from Tanzania.
The sale follows the completion of a feasibility study conducted by U.S.-based engineering firm K&M Advisors on the capacity and cost-effectiveness of generating power using imported gas.
“The defunct KPRL will now be under KPC and the Mombasa-Dar es Salaam pipeline project is key to feeding into the facility to ensure maximum use.
We hope once the 30,000 metric-ton gas facility is complete, the project will move to the next stage,” stated Davis Chirchir, Cabinet Secretary, for Energy and Petroleum in Kenya.
With both the study and transaction complete, the respective governments will proceed with finalizing the signing of a transnational agreement for the construction of a gas pipeline linking Tanzania’s Tanga facility with the renovated Kenyan refinery.
The planned 600km pipeline is expected to cost approximately $1 billion and aims to reduce the costs associated with transporting gas.
Currently, nearly half of the Kenyan market relies on imported gas from Tanzania, all of which is transported via truck.
In addition to the refinery rehabilitation, under the terms of the sale agreement, the KPC will utilize and assume control of the Mombasa storage facility. The storage facility has 45 tanks with a combined capacity to store 484 million liters.
