Kenya Pipeline is too strategic to sell, says CS

Energy Principal Secretary Mohamed Liban, CS Opiyo Wandayi and Kenya Pipeline Managing Director Joe Sang when they toured the KPC storage facilities in Nairobi on August 21, 2024. [Kanyiri Wahito, Standard]

The Kenya Pipeline Company (KPC) is a strategic asset and it will not be privatised, Energy and Petroleum CS Opiyo Wandayi has said.

Speaking during a visit to the company headquarters in Nairobi yesterday, the CS said the State and KPC management were exploring ways to lower pump prices.

“This is a strategic institution, with serious national security implications. It is an institution that the government has to hold onto for the foreseeable future and strategic positioning,” he said.

The company was last year listed among the government-owned entities that were up for privatisation.

Wandayi said the ministry and KPC would also focus on the external markets like Uganda, which "despite disengaging from the government-to-government arrangement, continues to import its fuel and pass it through our pipeline”.

“The project to extend the pipeline from Eldoret to Kampala is part of this strategy, consequently enabling the country to contribute to the regional integration,” he said.

Uganda expressed concerns that it had not been involved in the negotiations yet it heavily relies on the Kenya system.

Lauding the G-to-G deal, KPC Managing Director Joe Sang said the arrangement has had an impact on stabilising the shilling.

“We are handling, storing and transporting Uganda fuel. Today, we are handling about 90 per cent of Uganda’s market. We are keen to ensure all the fuel products to Uganda are delivered through Kenya,” he said

KPC also plans to sign an agreement with Rwanda. "We are in the tail end of signing a memorandum of understanding to be able to deliver products into Rwanda, to ensure the regional market is back to Kenya," said Sang.

Additionally, KPC said it pays Kenya Power about Sh4 billion annually, making it the power distributor’s top customer.

The CS said a new engagement between the ministry and the company had been fruitful.

“I am very pleased by the kind of progress that this organisation has been able to register in the past years,” he noted, adding that KPC recorded impressive performance in the last financial year, delivering Sh7.5 billion after-tax profits to the National Treasury.

“This underscores the fact that the organisation is running profitably.”

He said the management had committed to deliver up to Sh12.5 billion as the firm expands the volume of its handling and portfolio.

“We are venturing into a serious business of LPG that we want to roll out to all our education institutions and households,” he said.

As a way of diversification, the CS said KPC would establish fibre-optic cables across the country.