Kenya Crude Oil Pipeline

Kenya Crude Oil Pipeline, also Lokichar–Lamu Crude Oil Pipeline, is a proposed crude-oil pipeline in Kenya.[2][3][4] The pipeline will originate in the oil-rich South Lokichar Basin, near the town of Lokichar, in northwest Kenya to end at Port Lamu, on the Indian Ocean. The route will remain as originally planned in the Uganda–Kenya Crude Oil Pipeline, in August 2015.[5] The route, was proposed by Toyota Tsusho, the consultant selected by the two governments of that now-abandoned project.[6][7]

Kenya Crude Oil Pipeline
Kenya
Map of Kenya Crude Oil Pipeline
Location
CountryKenya
Coordinates00°29′06″S 39°41′12″E
General directionNorth to South
FromLokichar, Kenya
Passes throughGarissa, Kenya
ToLamu, Kenya
General information
TypeOil pipeline
PartnersGovernment of Kenya & Tullow Oil
Commissioned2025 (Expected)[1]
Technical information
Length554 mi (892 km)

Overview

Kenya has confirmed crude oil deposits of at least 750 million barrels.[8] Originally Kenya partnered with Uganda to export that oil through a joint pipeline to Port Lamu on the Indian Ocean coast.[9] When those plans fell through, Kenya announced it would build ts own pipeline from Lokichar to Lamu.[2][4][10][11] The projected length of this pipeline is about 891 kilometres (554 mi)[12]

The pipeline would carry anywhere from 80,000 to 120,000 barrels of crude oil every 24 hours, using 50 MW of electricity.[1] At that rate, the available known reserves would last about 20 years.[13][14]

Cost and timeline

In November 2016, the British oil conglomerate, Tullow Oil Plc, indicated that it would sign an agreement with the Government of Kenya, before the end of 2016, which would pave the way for the construction of the 865 kilometres (537 mi) pipeline. The joint venture will involve African Oil Limited and Maersk Oil, two other companies with oil exploration rights in northwestern Kenya. The joint venture agreement (JDA) will be followed by studies on the pipeline's technical requirements as well as its financing and ownership structure. Once the Joint Venture Agreement is executed, other studies can begin, including the Front End Engineering Design (FEED), the Environmental and Social Impact Assessments (ESIA) and "studies on pipeline financing and ownership”.[13] The agreement was signed on 24 October 2017.[15]

It was expected that the construction of this pipeline would commence in 2018 and last until 2021. The construction cost was budgeted at KES:210 billion.[14]

New developments

In January 2018, Total SA, announced its commitment to invest and become a shareholder in this pipeline, as well as in new oilfields in the Turkana exploration region. This represented a "change of mind" by the French oil conglomerate, which in 2016, strongly recommended against development of a pipeline along this route.[16]

In April 2018, the government of Kenya selected Wood Group Plc, a multinational energy services company based in Aberdeen, Scotland, to carry out the FEED engineering for the pipeline. The design work is expected to take eight months.[17]

Until the pipeline is built, trucks carry 2,000 barrels per day to Lamu for export and international testing.[1]

In November 2018, Business Daily Africa reported that the government of Kenya was seeking 20 percent shareholding in the company hat will own this pipeline through the Kenya Pipeline Company at an estimated cost of KSh22.6 billion (US$226 million).[18] The construction cost of the pipeline has been revised down to US$1.1 billion (KSh113 billion), from US$2.1 billion (US$214 billion). Besides the construction of the pipeline, other related infrastructure including roads, to link to the pipeline will have to be built, at an estimated cost id US$1.9 billion (KSh194 billion). A final investment decision on pipeline plans is expected in 2019.[18]

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See also

References
  1. "Petrodollars long wait as Turkana oil pipeline pushed to 2025". EnergySiren. 10 October 2018. Retrieved 27 April 2016.
  2. Ochieng, Lilian (23 April 2016). "Kenya to construct its pipeline as Uganda deal fails". Daily Nation. Nairobi. Retrieved 24 April 2016.
  3. PSCU (23 April 2016). "Kenya decides to go it alone on crude oil pipeline". Nairobi: 98.4 Capital FM. Retrieved 24 April 2016.
  4. PSCU (23 April 2016). "Kenya will build own pipeline, Uhuru tells EAC summit". Business Daily Africa. Nairobi. Retrieved 24 April 2016.
  5. Ochieng, Lillian (10 August 2015). "Uhuru And Museveni Strike Deal On Route for KSh400 Billion Oil Pipeline". Daily Nation. Nairobi. Retrieved 23 April 2016.
  6. Ligami, Christabel (28 August 2015). "Kenya, Uganda strike deal on oil route to export market". The East African. Nairobi. Retrieved 24 April 2016.
  7. Njini, Felix (28 August 2015). "Kenya Starts Talks With Uganda on Financing for Oil Pipeline". Bloomberg.com. Retrieved 24 April 2016.
  8. Odhiambo, Allan (28 April 2016). "Tullow to resume exploration, ups Turkana reserves". Business Daily Africa. Nairobi. Retrieved 28 April 2016.
  9. Kakwanja, Peter (27 March 2016). "Kenya's interests must prevail in Uganda oil pipeline debacle". Daily Nation. Nairobi. Retrieved 24 April 2016.
  10. "Uganda picks Tanzania for oil pipeline, drops Kenya plan". BBC News. 23 April 2016. Retrieved 24 April 2016.
  11. Wachira, George (26 April 2016). "Fast track Turkana-Lamu pipeline to beat Uganda to global oil markets". Business Daily Africa. Nairobi. Retrieved 26 April 2016.
  12. Reuters (2 May 2016). "Kenya targets to complete Sh210 billion pipeline by 2021". Business Daily Africa Quoting Reuters. Retrieved 2 May 2016.
  13. Mutegi, Mugambi (9 November 2016). "Tullow Oil set to sign pipeline deal with Kenya before year end". Business Daily Africa. Nairobi. Retrieved 10 November 2016.
  14. Mutai, Edwin (27 April 2016). "Government says oil pipeline to be complete in early 2021". Business Daily Africa. Nairobi. Retrieved 27 April 2016.
  15. Otuki, Neville (24 October 2017). "Tullow signs deal to build oil pipeline". Business Daily Africa. Nairobi. Retrieved 24 October 2017.
  16. Omondi, George (24 January 2018). "Total strikes deal to build Kenya's Lamu crude oil pipeline". Business Daily Africa. Nairobi. Retrieved 24 January 2018.
  17. "Kenya 2022 oil plan back on track as UK firm takes up pipeline design". The EastAfrican. Nairobi. 28 April 2018. Retrieved 29 April 2018.
  18. Andae, Gerald (28 November 2018). "Kenya seeks 20pc stake in Turkana crude oil pipeline". Business Daily Africa. Narobi. Retrieved 28 November 2018.

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