Kenya to start construction of crude oil export pipeline in 2018

Kenya is to begin the construction of its crude oil export pipeline in 2018 following Uganda’s choice to route its pipeline through Kenya’s neighbour Tanzania. The government is currently evaluating bids for the pipeline design.

The pipeline is expected to be a heated pipeline given the waxy nature of crude oil tested in Kenya. The 865km pipeline will originate in the country’s northern region and terminate at a planned port in Lamu. However, concerns that resulted in Uganda seeking an alternative route still remain unaddressed. The proximity of the pipeline to Kenya’s northern neighbour Somalia remains a major concern. Al Shabab terrorists from the country have carried out several attacks in Kenya in the past and the proximity of an economically significant pipeline close to their territory could become an easy target for the group.

Kenya is optimistic it will begin crude production at 2,000 bpd in 2017. The country plans to transport the crude via road in the interim. However, the cost of transportation, coupled with the low price of crude oil, is likely to make that plan uneconomical. The Kenya pipeline is estimated to cost $2.1bn and is likely to be funded by the government, the oil producing companies and international organisations

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