Kenya is banking on its new $385 million Kipevu Oil Terminal to regain its lost fuel business from Dar es Salaam port, which has been supplying the Great Lakes region.
According to Petroleum Principal Secretary Andrew Kamau, the new facility will serve as an import and export hub, allowing bigger ships to offload fuel and store it in the Kenya Petroleum Refineries Ltd (KPRL) depot in Mombasa.
"We will use this new facility since it has intake and offload mechanisms, where bigger ships can offload fuel, have it stored in the KPRL depot and thereafter pumped back to smaller vessels, which can supply Indian Ocean islands such as Zanzibar, Seychelles, Mauritius and other countries that lack such facility," Mr Kamau said.
The new terminal is expected to handle 35,000 tonnes of petroleum products monthly, making it a key player in the region's fuel market.
Kenya's plan is to create a petroleum products hub for the region, hoping to regain its lost business. The government has also begun converting the KPRL Changamwe depot in Mombasa into a storage facility for fuel and liquefied petroleum gas.
Kenya is also trying to lure back Uganda, the main user of the Mombasa port for transit cargo, to start importing fuel from Kenya through the Northern Corridor to Kisumu, then transfer it through Lake Victoria using the $170 million new fuel jetty in Kisumu.
Uganda imports at least 185 million litres of petroleum products monthly, mostly channelled through the Kisumu port and the Eldoret depot. Kenya transports about 900 million litres of petroleum products per month, and is banking on Tanzania's inadequate fuel transport infrastructure to sustain the Ugandan petroleum transshipment business.
According to Kenya Ports Authority (KPA), the old oil facility registered a total liquid bulk throughput of 8.63 million tonnes in 2021, up from 8.37 million tonnes in 2020.
Acting KPA managing director John Mwangemi said faster loading is expected to translate into lower prices for LPG, as oil-marketing companies are expected to pass the benefits of reduced demurrage costs to consumers.
