National Oil set to construct oil jetty in Mombasa

Mombasa port KenyaMombasa has only one main oil jetty at Kipevu where all petroleum products for Burundi, Rwanda, Uganda and Kenya are offloaded. (Image source: sarah0s)International investors are being sought for the construction of a huge oil jetty in the Port of Mombasa estimated to cost between US$80mn and US$100mn under a private-public partnership

The construction of the jetty in Kenya’s second largest city would be one of the initiatives the country has put to place itself strategically within the region’s oil business.

Currently, Mombasa has only one main oil jetty at Kipevu where all petroleum products for Burundi, Rwanda, Uganda and Kenya are offloaded.

The jetty can only contain ships of up to 85,000 mt and another smaller jetty at Shimanzi handles smaller cargo ships of up to 30,000 mt.

Imports through this jetty are reported to cost at least US$10 to US$25 per metric ton.

Rapid economic expansion within the East African Community has led to huge demand in petroleum products and as a result there has been increased investment of the sub-sector.

Increased import of petroleum has led to congestion of the jetties at the Kenyan ports calling for the construction of bigger and more efficient jetty. At the same time, Kenya is seeking US$1.2bn for the upgrade of the Mombasa refinery to increase its capacity.

Discovery of oil in Kenya and western Uganda has spurred industry players to expand their refining capabilities and benefit from the anticipated revenue once full exploitation of the oil field takes place.

The current refinery is operating below capacity and has been unable to meet rising demand for oil products in the region.

Directors of the Kenya Petroleum Refineries Ltd, which is co-owned by the Kenyan government and India’s Essar Group, are expected to meet next month to discuss funding for refurbishment.

The firm’s CEO, Brij Bansal, said that US$1.2bn should be raised next year mainly from shareholder contribution and debt.

Last year, Standard Chartered Bank was appointed a financial advisor responsible for raising funds and restructuring the funding after competitive bidding.

At the same time, the state owned Kenya Pipeline Corporation (KPC) is set for the construction of a new, bigger oil pipeline to replace the current one.

Mwangi Mumero

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