Kenya will quadruple its capacity to handle transit petroleum products to Uganda, Rwanda, and Burundi when the new Kipevu Oil Terminal in Mombasa is completed in January 2022, up from 35,000 tonnes now.
The new terminal, which cost $385 million, can handle up to four vessels at once, whereas the old terminal could only handle one.
The port is projected to lower the cost of petroleum products by lowering demurrage, or the extra time required to load and unload goods, which is a major contributor to the region's high oil prices.
The port is expected to reduce the cost of petroleum products by reducing demurrage, or the additional time necessary to load and unload cargo, which is a major factor in the region's high oil prices.
According to KPA, faster loading will result in lower LPG pricing.
Once operational, the new plant, according to Kenya Pipeline Company (KPC), will lower gas costs by 30%.
KPC is in talks with Kenya's Ministry of Energy to build a dedicated LPG storage facility with a capacity of 25,000 tonnes, according to the East African.
“The construction of the KOT (Kipevu Oil Terminal) to support the energy sector has made significant progress and upon completion by the end of this year, we shall have terminals consisting of four berths capable to berthing four vessels to benefit from economies of scale and reduce fee charged for waiting vessels,” said acting KPA managing director John Mwangemi.
The China Communications Construction Company built the facility to replace the Kipevu Oil Terminal, which is 50 years old.
The new terminal will be connected to Kipevu's storage facilities via subsea and land-based pipelines, and will be capable of handling crude oil, heavy fuel oil, and three types of white oil products: DPK-aviation fuel, AGO-Diesel, and PMS-Petrol.
KPC wants to take over the new port as well as the Kenya Petroleum Refineries.
"We expect tender for the construction of storage facility to be ready within three months," said KPC infrastructure development general manager David Muriuki. "Facility is slated to be finished within three years."