Kenya seeks to regain fuel business from Dar with its new reserve in Mombasa

Kenya seeks to regain fuel business from Dar with its new reserve in Mombasa

Kenya is banking on the $385 million new Kipevu Oil Terminal to wrest the petroleum business from Dar es Salaam port, which has been supplying the Great Lakes region.

Tanzania turned the tables on the port of Mombasa after persisted allegations of adulteration of petroleum products on the Northern Corridor. Then the three-year closure of the border between Uganda and Rwanda, and lower tariffs made both countries depend more on the Tanzanian port.

Now, with the new Kipevu facility, Nairobi plans to create a petroleum products hub for the region, hoping to regain its lost business. The government has also begun converting the Kenya Petroleum Refineries Ltd (KPRL) Changamwe depot in Mombasa, a few kilometres from Kipevu, into a storage facility for fuel and liquefied petroleum gas.

Kenya’s Petroleum Principal Secretary Andrew Kamau told The EastAfrican that the procedures for Kenya Pipeline Company (KPC) to take over the KPRL are about be concluded to make the facility a hub for bigger vessels.

Mr Kamau said the Kipevu Oil Terminal (KOT) will serve as an import and export facility.“We will use this new facility since it has intake and offload mechanisms, where bigger ships can offload fuel, have it stored in the KPRL depot and thereafter pumped back to smaller vessels, which can supply Indian Ocean islands such as Zanzibar, Seychelles, Mauritius and other countries that lack such facility,” Mr Kamau said.“The construction of KOT and its peripheral facilities is meant to supply Kenya with cheap gas and other petroleum products and ensure a steady supply of such products in the East African and other Indian Ocean Islands,” he added.

Nairobi is trying to lure back Uganda, the main user of the Mombasa port for transit cargo, to start importing fuel from Kenya through the Northern Corridor to Kisumu, then transfer it through Lake Victoria using the $170 million new fuel jetty in Kisumu.

Uganda imports at least 185 million litres of petroleum products monthly, mostly channelled through the Kisumu port and the Eldoret depot. Kenya transports about 900 million litres of petroleum products per month, and is banking on Tanzania’s inadequate fuel transport infrastructure to sustain the Ugandan petroleum transshipment business.

Last year, Uganda said it was exploring options to cut its reliance on Kenya for petroleum imports by increasing shipments through Tanzania, a move that put rattled the Mombasa port managers and government mandarins.

Currently, Kampala accounts for three-quarters of Mombasa port’s transit cargo, and any […]

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