Petroleum projects to boost exports and improve on fuel supply logistics

Today (Friday, November 17) is International Petroleum Day and therefore an opportune time to assess where Kenya stands in terms of fuel supply logistics. The Government, through the Kenya Pipeline Company (KPC), is currently undertaking a number of essential petroleum infrastructure projects to enhance the availability of fuel in Kenya and neighbouring countries. These include replacement of pipelines, enhancement of storage capacity and investment in loading facilities.

Banking on sufficient and efficient infrastructural systems, Kenya is assured of adequate, reliable and cost effective supply of petroleum products. It is important to point out that increase in local and regional demand for petroleum products has in recent years not been matched by the development of requisite infrastructure to meet supply chain and market requirements. This is the strategic gap that KPC seeks to bridge in order to fuel the national and regional economies.

Regional demand

Regional demand for refined petroleum has increased to 13 per cent of Kenya’s total exports, making it the country’s third largest export product after tea and cut flowers. Last year alone, Kenya exported about 2 billion litres of refined petroleum products to the five East African countries and the Democratic Republic of Congo.  Uganda leads the pack having imported products worth over Kshs 1 billion last year.

Completion of the pipeline from Sinendet to Kisumu (Line 6) in 2016 has already boosted petroleum product availability in the Western Kenya and the export market of Uganda, Eastern DRC, Rwanda, Burundi and Northern Tanzania. In addition, the installation of additional loading facilities to cope with the rising demand for petroleum products uplifts at KPC Eldoret depot, which serves Western Kenya and the neighbouring countries, is complete and the new facility is expected to enhance the country’s fuel exports in the medium to long term.

Since the new truck loading facility became operational in July this year, evacuation of product in Eldoret has increased from 4 million litres per day to a massive 6.5 million litres per day. This has increased service delivery efficiency in the depot while maximizing the full benefits of the Nairobi-Eldoret pipelines. Because of this intervention, there will be no need for trucks to drive all the way to Nairobi to fetch fuel thus unnecessarily increasing local pump prices.

Ongoing construction of the Kisumu Oil Jetty on the shores of Lake Victoria, which is set to be completed by end of this year, will go a long way towards boosting fuel exports to East African through Uganda and Tanzania. The jetty is expected to boost throughput in Kisumu by 1 billion litres a year in phase 1 and up to 3 billion litres per year by 2028. With such volumes, the project has the potential to turn Kisumu into a focal point of oil and gas commerce in the region making it one of the busiest inland ports in Africa.

The above projects have been ongoing in tandem with the Sh48 billion new Mombasa-Nairobi oil pipeline project (Line 5), the country’s second largest infrastructural undertaking, which is now in the final phase of development and will be ready for commissioning by the end of this year. The completion of this project raises hopes of lower road maintenance costs given the hundreds of trucks the new line will remove from the country’s roads.

Increased volumes

The new line will see installation of 4 new pump stations in Changamwe, Maungu, Mtito Andei and Sultan Hamud and 2 booster pumps in Kipevu all complete with new firefighting systems together with other energy efficient equipment and pipeline monitoring technologies for efficiency and safety in fuel supply logistics in Kenya and the region.

With the imminent completion of Line 5, there is need for enhanced operational flexibility in Nairobi given the higher volumes of fuel that will be pumped upstream. In line with this, KPC has erected four additional tanks in Nairobi Terminal to provide sufficient capacity for receipt of higher volumes of diesel, super petrol and jet fuel products once the new line is operationalised. The commissioning of these tanks is also expected before the end of this year.

By broadly investing in these infrastructure projects that improve on how fuel gets to our customers and consumers, the country has the opportunity to bolster regional business and strength her ties with the neighbouring countries as we strive to transform the lives of our people.

Joe Sang is the Managing Director of Kenya Pipeline Company. He can be reached on [email protected]