KPC said Indian firm Prashanth Project Ltd (PPL) was currently working on four tanks with a capacity to store 133 million litres and Zakhem International Construction is at the tail-end of finishing a new pipeline from Mombasa to Nairobi.
“Nairobi’s current storage capacity is 100 million litres. New tanks will more than double [the] Kenyan capital’s storage, receive more fuel for domestic use and export to Uganda among other countries,” said the state-owned firm.
Kenya pays ship owners over US$100 million per year as demurrage fees for tankers failing to offload fuel, as Mombasa’s port lacks adequate storage space (ullage) and a new pipeline to pump more products to Nairobi has been delayed.
Building work for Nairobi’s new storage tanks is over 95% complete. These will receive higher volumes of oil products pumped by a new 20-inch (508-mm) pipeline from the state-owned Kipevu oil storage facility (KOSF) in Mombasa.
The new conduit will enhance fuel delivery inland with a flow rate for phase 1 of 1 million litres per hour by end of this year, 1.9 million litres per hour for phase 2 in 2023 and 2.6 million litres per hour in phase 3 by 2044.
In 2014 Zakhem was awarded a contract to construct the new Mombasa-Nairobi pipeline and conclude all work in 2016.It faced delays owing to multiple design revisions causing procurement delays and the need for additional items.
PPL started building the four tanks in 2015 to provide additional capacity to receive higher diesel, gasoline and jet fuel volumes from Mombasa through a new line (Line 5) which is currently over 94% complete.
Refined oil products demand rising by about 6% per year in Kenya with other landlocked East African countries is projected to reach 6.8 billion litres in 2020 and 24.5 billion litres by 2040 as a result of economic growth.
KPC’s managing director Joe Sang said that major strategic investments are being made in infrastructure facilities to boost country’s profile as a hub for energy, and the four tanks will guarantee security of fuel supply to the region. “Tanks are part of the strategy because once they are complete, [the] provision of sufficient capacity for receipt of higher volumes of fuel will be guaranteed once existing [the] Mombasa-Nairobi pipeline (Line 1) is replaced,” he said.
KOSF holds 326,333 cubic metres of oil and KPC is in the process of replacing the 14-inch (356-mm) Line 1 that has been operational for 39 years since 1978, and which is currently pumping 830,000 litres of fuel an hour together with the new Mombasa-Nairobi pipeline.
NDT Middle East, an inspection firm, recommended the replacement of Line 1 after inspecting the old pipeline on behalf of KPC, as it was no longer economical to repair the facility because of extensive corrosion.