Pipeline bets on rail transport to lift earnings

The Kenya Pipeline Company (KPC) plans to utilise the revamped rail transport to ferry oil products to upcountry markets.

The State agency said it will use bulk-ferrying fast locomotives brought under the Standard Gauge Railway to boost their supply. This is in addition to the ongoing expansion of the pipeline network between Mombasa and Kisumu at a total cost of Sh53 billion.

Corporate Communications manager Jason Nyantino said the move is part of KPC’s ambitious 10-year portfolio expansion plan that seeks to push profit before tax to Sh80 billion, up from the current Sh10.7 billion, with the asset base projected to rise to a staggering Sh790 billion.

Although he did not disclose the capacity they will be ferrying by rail, Nyantino said the decision was informed by the need to boost security of supply, a move which could steady the ever-fluctuating fuel prices in the country.

“We are also working on large volume depots to ensure that supply is always high. This move, we believe, will go a long way in cushioning the country from global shocks,” explained Nyantino.

He reckoned the latest initiative is calculated to counter competition from the large number of trucks still on the roads. “We are alive to the fact that many people are eyeing the SGR for fuel transport and we will not be left behind.”

The firm has also announced plans to introduce jetties on Lake Victoria to transport fuel to Jinja (Uganda), Mwanza and Bukoba (Tanzania) in a move aimed at edging out competition posed by truckers who transport the commodity by road from Kisumu.

Nyantino said in the next two years they will have vessels moving fuel headed for Uganda, Tanzania and Congo over the lake.

Other ventures being considered include a liquid petroleum gas bottling plant in Mombasa and leasing of depots.