Ujenzi wake ukikamilika basi itaongeza mchezo na kutuweka kwenye ligi mpya.
Kenya has upped its quest to wrest the oil export market from Tanzania by commissioning the construction of an oil jetty in Kisumu in the western region. FILE PHOTO | NMG
By ALLAN OLINGO and KENNEDY SENELWA
Posted Tuesday, May 9 2017 at 11:43
IN SUMMARY
- The country is seeking to woo back Uganda, Rwanda and Democratic Republic of Congo and increase the amount of fuel they import from Kenya.
- Kenya lost its position as the preferred petroleum products importation route for landlocked East African countries late last year after all EAC countries, apart from Uganda, reduced their oil imports through Nairobi due to concerns of adulteration.
- Kenya is also expected to introduce policy measures to support the development of the petroleum sector with a view to securing the country’s position as the regional hub for refined oil products.
Kenya has upped its quest to wrest the oil export market from Tanzania by commissioning the construction of an oil jetty in Kisumu in the western region.
The country is seeking to woo back Uganda, Rwanda and Democratic Republic of Congo and increase the amount of fuel they import from Kenya.
Kenya awarded Southern Engineering Company Ltd (SECO), a flagship company of Alpha Group’s marine division, the contract to build the $170 million Kisumu Oil Jetty within the next six months to enable the country to export fuel to Uganda and northern Tanzania. Uganda is also building a refined petroleum products depot and jetty in Entebbe to receive fuel transported by barges over Lake Victoria from Kisumu.
Kenya lost its position as the preferred petroleum products importation route for landlocked East African countries late last year after all EAC countries, apart from Uganda, reduced their oil imports through Nairobi due to concerns of adulteration.
The decision could see Nairobi’s earnings dip from the $700 million it had received in 2015 from re-exporting oil to its regional neighbours.
Uganda, South Sudan, Rwanda, Burundi and the Democratic Republic of Congo import a huge percentage of their petroleum products using trucks from the Kenyan port of Mombasa to the Eldoret or Kisumu depots. Refined petroleum, which forms 13 per cent of Kenya’s total exports, is the country’s third largest export product after tea and cut flowers.
Competitive edge
Kenya Pipeline Company (KPC) managing director Joe Sang said the oil jetty’s completion will increase the firm’s competitive edge as East Africa’s leading fuel transporter as the pipeline system is the safest and most cost effective way of moving oil products.
“The jetty’s target market will create an integrated marine fuel transportation system in the region making it more efficient and commercially viable to reduce transportation cost for marketing companies. We also believe that we will claw back the lost market share as this will give us a solution to the adulteration problem we have faced over the years, which saw our neighbours scale back their oil orders from us,” Mr Sang said.
Kenya is hoping to use the jetty to increase exports to Uganda and mines in northern Tanzania. The jetty is expected to boost Kisumu depot’s throughput by one billion litres annually in phase one and up to three billion litres per year in the next ten years. The depot has a maximum storage capacity of 39 million litres of oil products.
Annual demand for petroleum products in western Kenya is about 1.1 billion litres and regional needs stand at approximately 3.3 billion litres.
The pipeline firm received bids to build the Kisumu jetty from Mahathi of India, SECO, Stefanuti Stocks (Pty) Ltd, Alindse General Trading with Himilo Construction & Supply Ltd as a consortium, China Communication and Construction Co Ltd, and Parlym International when the tender was floated in January.
“The fuel moved by barges from Kisumu will be offloaded at Entebbe jetty and kept in a storage terminal for enhanced security, then picked by oil marketers for overland distribution,” said Mr Sang.
SECO’s administrative director John Msafari said the firm will construct the Kisumu jetty and water tanker berthing place 250 metres from the shoreline in a properly dredged area to facilitate movement of vessels for loading fuel.
The flow of products to the Kisumu depot has increased to 350,000 litres per hour from 110,000 litres after the $57 million new 10-inch 122-kilometre pipeline from Sinendet was completed last year.
Kenya banks on Kisumu jetty to reclaim oil business