$1bn oil pipeline to be constructed in Kenya

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THE government of Kenya through Tullow Oil, a leading independent oil exploration and production company is set to construct an oil pipeline worth $1bn by 2022.

According to Tullow Oil Kenya Managing Director Martin Mbogo, the pipeline will be a joint venture between the government and the Kenya Joint Venture (KJV) – whose shareholders are Tullow, Africa Oil and Total.

 821 km long pipeline project

The pipeline will be 821 km long and will transport around 80,000 barrels of oil per day from the Lokichar oilfields in Northern Kenya to the Lamu seaport. The project will be financed by 70 percent debt and 30 percent equity.

Kenya discovered commercial oil in 2012 in its Lokichar basin, which Tullow Oil estimates contains an estimated 560 million barrels in proven and probable reserves. Since 2012 then, the country has struck 750 million barrels of commercially viable oil, with ongoing exploration showing that the number could potentially increase to over one billion barrels.

Search for buyers of crude oil exports

Kenya’s early oil export project transports 600 barrels of oil per day from Turkana oilfields by road to Mombasa Port for storage, ahead of shipments expected to begin mid 2019. The East African nation has reached out to 18 global oil refinery firms in the ongoing search for buyers of crude oil exports.

The Managing Director pointed out that discussions on the project will take place during the 2019 International Petroleum (IP) Week (February 26-28) that is expected to attract big players in the oil and gas industry.

‘Early oil project is not a commercial venture, it’s about finding out exactly what are the requirements from a logistical point of view and a social point of view on what we will need to produce full field,’ said Andrew Kamau, Principal Secretary, State Department of Petroleum.

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