It turns out since 2013 Kenya refinery was converted to a storage depot

Kenya: Refinery wants out of pipeline union
WEDNESDAY FEBRUARY 27 2019





The crude oil storage tanks at Kenya Petroleum Refinery in Changamwe, Mombasa. Kenya Pipeline Company is pushing for a renewal of the lease after the facility turned out to be an important revenue stream. PHOTO | LABAN WALLOGA | NMG

In Summary

• Since the exit of Indian investor Essar Energy in 2014, KPRL has largely remained a liability for Kenyan taxpayers.
• It was converted into a storage facility after halting refining operations in 2013 after the government-forced merger between KPC and KPRL.
• KPC is pushing for a renewal of the lease after the facility turned out to be an important revenue stream.

By NJIRAINI MUCHIRA
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Three years after the Kenya Pipeline Company took over the Kenya Petroleum Refinery Ltd in a government-forced merger, the lease under which the union was created is set to expire in March.
This creates uncertainty about the operations of KPRL, which was converted into a storage facility after halting refining operations in 2013.

Since the exit of Indian investor Essar Energy in 2014, KPRL has largely remained a liability for Kenyan taxpayers, who had to shoulder its financial burden.

In 2017, the government offered the refinery to KPC under a three-year lease.
Now, KPC is pushing for a renewal of the lease after the facility turned out to be an important revenue stream, earning it $20 million over the past 20 months.

Hudson Andambi, KPC acting managing director, said the process of renewing the lease is ongoing.

He said that additional storage capacity has helped improve operational efficiency and flexibility.

However, it has emerged that some KPRL board members are opposed to the renewal of the lease and want the company to operate independently after realising that it can make money both for oil marketers and for the crude that Tullow Oil has been storing awaiting exportation.

“There is a debate within the board on whether the lease should be renewed or not. The popular feeling is that KPRL no longer needs KPC to manage its storage facilities,” said a source privy to the matter.

KPRL is also uncomfortable with plans by KPC to invest about $65 million in a bulk liquefied petroleum gas handling and storage facility on its land.

But KPC is determined to hold on to KPRL after investing $3 million in rehabilitating and modernising the storage tanks, which has helped to streamline transportation of fuel and enabled Kenya to boost its strategic petroleum reserves from 12 days to 30 days.

KPC has also spent $3.8 million over the past 20 months paying interest on KPRL bank loans.

Petroleum reserves
Before KPRL was converted into a storage facility, Kenya used to depend entirely on the Kipevu Oil Storage Facility with its capacity of 320 million litres.

KPRL has 45 tanks with a total storage capacity of 484 million litres in Mombasa, of which 254 million litres is reserved for refined products and 233 million litres for crude oil.

Taking over the KPRL tanks increased KPC’s total capacity to 574 million litres.
The enhanced capacity has been instrumental in facilitating quick berthing of vessels to discharge fuel, in the process saving the country about $2 million per month that was being incurred in demurrage charges.

“KPC earned Ksh400 million ($4 million) from KPRL last year. This shows that storage is serious business,” Petroleum Principal Secretary Andrew Kamau told The EastAfrican.

He said the decision to pursue the renewal of the lease lies with KPC, which has been servicing the interest on KPRL’s loans and has also been paying KPRL staff salaries.

While KPRL wants to take back its storage tanks, the petroleum industry is apprehensive about the company’s ability to manage the business, considering its past battles with oil marketing companies.

In addition, there are reservations about KPRL’s ability to continue servicing the loans to banks as well as the compensation claims to oil marketing companies, which stood at $95 million at the time it entered into the lease agreement with KPC.

To improve the importation, transportation and distribution of petroleum, KPC has invested $52.5 million to increase the storage capacity in its Nairobi depot. The project involved construction of four additional tanks following the completion of the new Mombasa-Nairobi pipeline.

The additional tanks, with a capacity of 133 million litres, have more than doubled the storage capacity, from 100 million litres to 233 million litres.

Kenya: Refinery wants out of pipeline union

Sometimes ukigundua ulikua haujui kitu flani, hayo ni yako, unajiambia, "oooh, kumbe nilikua sijui chips ni viazi... sio kuzunguka mtaani kutangazia kila unaejua kua chips inatengenezwa na viazi!...
Nakumbuka wakati huo ilipokua inafunga biashara ya refinery kulika na maandamano makali kule Mombasa....

• Posted On: 03rd Dec 2013 00:00:00 GMT +0300

BY JAMES ANYANZWA
KENYA: Kenya will operate without a refinery of its own, the Energy ministry has confirmed.
Energy and Petroleum Cabinet Secretary Davis Chirchir last week told Business Beat that once the government severs ties with Essar Energy, it would convert the Kenya Petroleum Refineries Ltd into a storage facility. This would be in line with recommendations made by the Energy Regulatory Commission.
The energy industry regulator in April recommended that KPRL — which is the only oil refinery in East Africa — be used to handle imported refined petroleum products, given that it was proving to be more costly to refine products at the facility.
ERC estimated that in the 28 months between December 2010 and April this year, the economy had lost Sh13 billion due to inefficiencies at the refinery.
This works out to about Sh15 million in losses a day. The money is factored into the retail price of petroleum products at petrol stations.
Mr Chirchir, however, said jobs would not be lost, adding that the about 300 workers would be redeployed to the 800,000 metric-tonne storage facility. KPRL currently uses only 260,000 metric tonnes.
“This refinery is not an asset that we can completely close. The option is to turn it into a tank to store more products,” Chirchir said. “We don’t want people to lose jobs because we are not closing the refinery.”
The government will have to take up the 50 per cent share Indian firm Essar Energy owned in the Changamwe-based refinery.
The National Treasury is expected to have at least six months to source for funding and complete the transaction.
Chirchir said the government plans to complete the transaction as early as possible.
“We are going to reduce this period.”
It’s official — Kenya will stop refinery operations : The Standard
The conversion of KPRL into a storage facility will mean that Kenya will have to put up a new facility or use the planned Ugandan refinery if it decides to being refining petroleum. Chirchir said Kenya is still weighing its options.

Essar Energy announced plans to exit from the joint venture it operated with the government, saying the upgrade of the 53-year-old refinery is not economically viable in the current refining environment.
Essar had committed to undertake a $450 million (Sh38.8 billion) upgrade of the facility before announcing it had quit the venture.

Kafrican said:

Sometimes ukigundua ulikua haujui kitu flani, hayo ni yako, unajiambia, "oooh, kumbe nilikua sijui chips ni viazi... sio kuzunguka mtaani kutangazia kila unaejua kua chips inatengenezwa na viazi!...
Nakumbuka wakati huo ilipokua inafunga biashara ya refinery kulika na maandamano makali kule Mombasa....

• Posted On: 03rd Dec 2013 00:00:00 GMT +0300

BY JAMES ANYANZWA
KENYA: Kenya will operate without a refinery of its own, the Energy ministry has confirmed.
Energy and Petroleum Cabinet Secretary Davis Chirchir last week told Business Beat that once the government severs ties with Essar Energy, it would convert the Kenya Petroleum Refineries Ltd into a storage facility. This would be in line with recommendations made by the Energy Regulatory Commission.
The energy industry regulator in April recommended that KPRL — which is the only oil refinery in East Africa — be used to handle imported refined petroleum products, given that it was proving to be more costly to refine products at the facility.
ERC estimated that in the 28 months between December 2010 and April this year, the economy had lost Sh13 billion due to inefficiencies at the refinery.
This works out to about Sh15 million in losses a day. The money is factored into the retail price of petroleum products at petrol stations.
Mr Chirchir, however, said jobs would not be lost, adding that the about 300 workers would be redeployed to the 800,000 metric-tonne storage facility. KPRL currently uses only 260,000 metric tonnes.
“This refinery is not an asset that we can completely close. The option is to turn it into a tank to store more products,” Chirchir said. “We don’t want people to lose jobs because we are not closing the refinery.”
The government will have to take up the 50 per cent share Indian firm Essar Energy owned in the Changamwe-based refinery.
The National Treasury is expected to have at least six months to source for funding and complete the transaction.
Chirchir said the government plans to complete the transaction as early as possible.
“We are going to reduce this period.”
It’s official — Kenya will stop refinery operations : The Standard
The conversion of KPRL into a storage facility will mean that Kenya will have to put up a new facility or use the planned Ugandan refinery if it decides to being refining petroleum. Chirchir said Kenya is still weighing its options.

Essar Energy announced plans to exit from the joint venture it operated with the government, saying the upgrade of the 53-year-old refinery is not economically viable in the current refining environment.
Essar had committed to undertake a $450 million (Sh38.8 billion) upgrade of the facility before announcing it had quit the venture.

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So that means Tanzania is the only country with a refinery though small!

haaa haaa
This's an alternative use of fabrics.

Geza Ulole said:

So that means Tanzania is the only country with a refinery though small!

Click to expand...

Tanzania haina refinery, TIPER ilifungwa kwa sababu mabepari walitaka ready made petroleum products, kiwanda cha Mwl Nyerere kikafa kama mashirika mengine na kampuni(viwanda) mpaka kiberiti hununuliwa kutoka China!

Danganyika doesn't have a refinery you hopeless liar