After a delay of more than three years, Kenya is finally set to start construct- ing a modern oil importing facility in the coastal city of Mombasa.
The Kenya Ports Authority (KPA) announced earlier this month that it was in the process of identifying a contractor for the $116.3-million terminal.
The new offshore fuel loading and offloading facility will replace the 50-year-old Kipevu oil terminal, which cannot cope with rising demand for petroleum products in the East African nation.
KPA head of procurement Yobesh Oyaro says that 12 international companies have been shortlisted to battle it out for the con- tract out of the 31 companies that bid for the project, which will start in January next year.
The shortlisted companies are China Railway Construction Corporation, China State Construction Engineering Corporation, Saipem Afcons Infrastructures, Jan De Nul, China Communications Construction Company and Dredging International. Also in the running are China Gezhouuba Group, Sinopec International Petroleum Service Corporation, Boskalis Dredging & Marine Experts, CPECC & Power China JV, China CAMC Engineering and Besix, CMR & Van Oord.
“We hope to complete the financial capa- city and technical know-how evaluation process and award the contract by October,” Oyaro says.
He adds that the KPA estimated the project will be completed in 30 months.
The new terminal will expand Kenya’s oil handling and storage capacity by almost 400%.
The facility will handle four ships of up to 200 00 dead weight tons (DWT), up from current capacity of one ship with a maximum capacity of 100 000 DWT. Increasing capacity will allow larger quantities of refined oil products to be imported, while also improving efficiency.
The fact that only one vessel can dock and offload at Kipevu has been the main reason why fuel prices are high in Kenya, as oil companies incur huge demurrage costs.
The decision to replace the Kipevu terminal, which is the country’s primary facility for receiving imported refined petroleum products, both distillates and spirits, comes at a time when demand for petroleum products in Kenya and the wider East African region is growing rapidly.
Effectively, Kipevu has been unable to meet the growing demand, as its capacity is not adequate for regional demand for petroleum products, estimated at 600-million litres a month.
Besides Kenya, the terminal also serves landlocked countries in East Africa, including Uganda, Rwanda, Burundi and parts of the Democratic Republic of Congo.
The KPA has repeatedly admitted that the terminal, which was commissioned in 1964, is dilapidated and is unable to meet demand for refined petroleum products.
Construction of the new terminal is part of a bigger strategy by the Kenya govern- ment to invest in import, storage and trans- port infrastructure in order to streamline the petroleum industry and stabilise prices.