The Kenya Pipeline Company (KPC) is set to construct a cooking fuel storage facility on the Kenya Petroleum Refineries Ltd (KPRL). The transfer is expected to ease the importation of Liquefied Petroleum Gas (LPG) into the country, rising competition amongst oil entrepreneurs and, in turn, bringing down the price of the gas.
The facility can also be expected to enable players to import cooking fuel through the Open Tender System (OTS), a gasoline importation mechanism supervised by the Petroleum Ministry that contracts oil companies with the lowest bids to import petroleum products on behalf of the business. The bulk storage facility, to be owned by the government, may additionally usher in an era of value controls for cooking fuel.
KPC has started the search for an organization that it stated would provide engineering designs for the proposed facility, which is in a position to inform the process of choosing a contractor for the development works.
The advisor will also undertake environmental impact evaluation as properly as LPG demand in the Kenyan market. “The proposed new facility is to be designed as a ‘common user’ facility for dispensing LPG to interested parties by way of rail siding, truck loading, and bottling services,” said KPC in tender paperwork.
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“KPC is desirous of implementing storage capacity of a minimal of 25,000 metric tonnes in the medium term and 50,000 metric tonnes in the long term topic to confirmation after endeavor the LPG demand study.” The facility at KPRL, which KPC runs by way of a lease, might be linked to the second Kipevu Oil Terminal (KOT 2), which is nearing completion.
In 2005, a examine collectively carried out by the Ministry of Energy and The World Bank beneficial that LPG storage amenities with whole capacities of 8700 tonnes be set up in the three cities including Nairobi, Mombasa and Kisumu, and the two major towns of Eldoret and Nakuru.
Meanwhile, KPC is looking for a transaction adviser to help it conclude the takeover of the defunct KPRL as it seeks to boost its storage capacity. KPRL was positioned beneath the management of KPC in 2017 as a storage facility for imported crude oil after Indian investor Essar did not revive the country’s only oil refinery.
KPRL has forty five tanks with a total storage capacity of 484 million litres. About 254 million litres is reserved for refined products while 233 million litres is for crude oil.
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