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Kenya finally set to move ahead with Mombasa offloading facility

26th September 2014

By: John Muchira

Creamer Media Correspondent

  

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Kenya is set to finally embark on the construction of a second petroleum offloading facility to tackle importation constraints that have been blamed for high oil product prices in the country.

After a three-year delay, State-owned National Oil Corporation of Kenya (Nock) has revived plans to construct an offshore fuel loading and offloading facility in the coastal city of Mombasa.

Construction of the facility, the cost of which is estimated at $180-million, is the outcome of a feasibility study by Spannish engineering firm Alatec Consulting, which showed Kenya requires a second petroleum jetty to meet growing demand for petroleum products.

Currently, the Kipevu oil terminal is the country’s primary facility for receiving imported refined petroleum products, both distillates and spirits, but its capacity is not adequate for regional demand, estimated at 450- million litres a month.

Besides Kenya, the terminal also serves Uganda, Rwanda, Burundi and parts of Democratic Republic of Congo.

The new facility will also save oil companies the staggering $100-million that they incur each year in demurrage costs.

Nock is seeking a transaction adviser who will provide advice on the project, including all the detailed financial, technical and legal work required to enable the company to implement the project. Nock will oversee the project on behalf of the Kenya government.

The new facility will position Kenya as a major transit hub for petroleum products destined for other ports along the eastern coast of Africa and the Indian Ocean islands.

“Besides, with the growing interest in petroleum exploration in East Africa as a result of recent high-profile discoveries, there is need for East Africa to begin preparing for success by setting up the infrastructure necessary to take the discoveries to market,” says Nock.

Edited by Martin Zhuwakinyu
Creamer Media Magazine Managing Editor

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