Kenya Pipeline Company (KPC) acquires Konza Oil Terminal

Kenya Pipeline Company MD Joe Sang. Kenya Pipeline Company (KPC) has signed an agreement with Petrocity for the use of the firm’s Konza Oil Terminal for storage of petroleum products. (PHOTO: BONIFACE OKENDO/ STANDARD)

Kenya Pipeline Company (KPC) has signed an agreement with Petrocity for the use of the firm’s Konza Oil Terminal for storage of petroleum products.

This is as KPC seeks to improve and stabilise flow of products in the country. KPC has leased the 38.5 million-litre facility situated at Konza in a bid to reduce congestion on the Nairobi-Mombasa Highway and stabilise supply of petroleum products in Nairobi, which has in the past experienced crippling fuel outages.

The KPC Konza Oil Terminal (KKOT) is also expected to grow revenues for the pipeline company, which competes with road tankers for the oil transportation business. “We will charge $10 per 1,000 litres of product. Out of this, Petrocity will get $6.5 while KPC will get $3.5,” said KPC Managing Director Joe Sang.

Decongest Nanyuki Road

He added that in addition to providing more space to oil marketers, using the terminal will play a critical role in decongesting the Mombasa-Nairobi highway as more products will be moved by pipeline as opposed to the road.

It will also ensure steady supply of products in Nairobi and its environs, which have been susceptible to supply shocks that have caused major product outages in the past. “The terminal also provides an alternative supply for the Nairobi market. KKOT is strategic and in case of any interruption at the Nairobi oil terminals, it will keep the city and its environs wet,” said Sang.

The terminal will also help in decongesting Nairobi’s Nanyuki Road, which is where most major oil marketing companies receive product from the KPC Nairobi Terminal.

“We commenced operations in KKOT mid this year and since then, we have moved over 108 million litres of product comprising super petrol (35 million litres), diesel (60 million litres), and illuminated kerosene (13 million litres). This financial year, we have projected to push over 340 million litres of product at KKOT,” Sang said.

The partnership is part of a bigger strategy by KPC where it is in plans to diversify and build on its petroleum product transportation business. The company is venturing into different segments of the energy sector including storage and also growing its presence in other countries in the region.