On June 1, 2022, Kenya announced plans to construct a 25,000-tonne storage facility for Liquefied Petroleum Gas (LPG) in Mombasa, aiming to dominate the supply of the commodity in the region.
The facility, to be built by the Kenya Pipeline Company (KPC), will connect to the Sh42 billion new Kipevu Oil Terminal 2 (KOT) at the port of Mombasa. This move comes after Kenya banned imports of gas from Tanzania through the Namanga border.
According to KPC, the new facility will enable faster loading of cooking gas for distribution by trucks, reducing demurrage costs and translating to lower prices for LPG by 30 percent once operational.
Currently, limited LPG storage capacity in Mombasa means that ships stay longer at the port, leading to higher demurrage costs which are then transferred to consumers, resulting in high prices of bottled gas.
With the completion of KOT2, the business which has been controlled by a few companies will end the monopoly, as already five companies have applied to connect to the terminal at the port of Mombasa.
According to the National Environment Management Authority (Nema) and Energy Regulatory Authority (ERC), more than five companies have applied to get a license to construct gas facilities.
