Name and Location
Mombasa refinery upgrade project, Kenya.

Project Description
The project proposes to upgrade and modernise Kenya’s Mombasa oil refinery, the only existing refinery in East Africa, to increase its output capacity from 1,6-million tons a year to 4-million tons a year.

The facility is operating at suboptimal capacity, owing to a lack of investment in upgrades and maintenance. At full capacity, the facility will cater for about 90% of Kenya’s current demand.

The facility currently processes Murban and Arab medium crude from the United Arab Emirates and Saudi Arabia. There are plans to process heavier crude oil from Uganda, which currently depends on Kenya for its fuel products, along with Burundi and Rwanda.

Value
The upgrade is expected to cost $450-million.

Duration
Not confirmed.

Client
Kenya Petroleum Refineries Limited (KPRL), a joint venture between the government of Kenya and India-based Essar Energy.

Key Contracts and Suppliers
Foster Wheeler (basis of design) and Standard Chartered Bank (financial adviser).

Latest Developments
After acquiring a 50% share in KPRL in 2009, Essar Energy announced plans to invest between $400-million and $450-million to increase the facility’s capacity. The upgrade has been planned for a while; however, it was put on hold as Essar sought time to restructure its initial modernisation plans in an effort to allow possible crude imports from Uganda.

Landlocked Uganda depends on Kenya for its fuel products and recently discovered at least two-billion barrels of oil along its western border with the Democratic Republic of Congo.

On Budget and on Time?
The decision to alter the initial plans is likely to increase the project costs and delay the upgrading of the refinery.

Contact Details for Project Information
Essar Energy head of media relations Andrew Turpin, tel +44 2 07 408 8702, cell +44 7 82 728 3659 or email andrew.turpin@essar.com.
KPRL, tel +254 41 343 3511, fax +254 41 343 2603 or email refinery@kprl.co.ke.