This archive report was first published on 6 January 2022.
On a four-day visit to several African countries, State Councillor and Minister of Foreign Affairs for the People's Republic of China, Wang Yi, will accompany President Uhuru Kenyatta to inspect the progress of the new Kipevu Oil Terminal (KOT) under construction at Mombasa port on August 2021.
The Sh40-billion facility, expected to ease the process of importing petroleum products, is being constructed by China Communication Construction Company and financed by Kenya Ports Authority (KPA).
The new terminal, which has multiple berths, will reduce freight costs for fuel importers while reducing the penalties levied by ship owners for delays in discharging products once they arrive at the port.
According to KPA acting Managing Director John Mwangemi, the terminal will have four berths, capable of handling six different hydrocarbon import and export products, including liquefied petroleum gas (LPG), crude oil, and heavy fuel oil.
The terminal will initially be able to accommodate three ships concurrently with a capacity of 200,000 tons each, with a fourth berth provisionally constructed to be fitted with facilities in future commensurate with demand.
Financed by KPA and constructed by China Communication Construction Company, the terminal will replace the first KOT built in 1963 to serve the then East Africa Oil Refinery, which later became the Kenya Petroleum Refineries Limited (KPRL).
With the new terminal, the vessel turnaround time is expected to reduce from four days to two days, thereby reducing demurrage costs. Demurrage is a penalty that vessel owners charge importers of cargo for keeping their ships waiting beyond the agreed time.
According to a report by the Finance and National Planning Committee, different vessel owners were paid Sh1.3 billion in demurrage charges between January and August 2021.
