By Macharia Kamau
The National Oil Corporation (Nock) plans to construct a new facility that will allow faster and easier discharge of petroleum products from ships in 2013
Nock has a consulting firm – Alatec Ingenieros Consultores Arquitectos – on site undertaking a feasibility study to establish how the facility will be set up and determine the actual costs for the facility referred to as an ‘oil jetty’ in industry lingo.
Preliminary estimates have projected the offshore jetty to cost between Sh7.9 billion and Sh9.9 billion ($80 – 100 million).
The consultant is expected to give a final feasibility report in January next year. Nock will then start the process of securing finances and tendering for a contractor to undertake the construction works in 2013.
Construction of the jetty is expected to take two years and according to Nock, it will be complete by 2015. The project take off is, however, pegged on financing, which the government-run oil marketer is yet to secure.
Sumayya Athmani, the managing director Nock, said once complete, the jetty would give the country an edge in becoming a key petroleum-trading hub.
"Kenya is geographically positioned close to the dealers, and it is also close to the huge markets of Africa and South East Asia. By improving our infrastructure, we can make the country a petroleum trading hub, where dealers from Asian and African countries nearer to Kenya than the Middle East can import from," she said.
Competitiveness
"The new jetty will be both an offloading and loading jetty, and will improve Mombasa port competitiveness as a hub for petroleum business in the region."
The jetty, which will be offshore as opposed to on shore, will allow the berthing of larger vessels with the capacity of up to 280,000 dead weight tonnes, which is in comparison to the 80,000 dead weight tonnes at the Kipevu jetty. The other discharge facility, the Shimanzi jetty, has a smaller capacity and discharging there usually ends up being costly for oil importers.
"The Kipevu jetty is highly constrained and is unable to meet with the ever rising volumes of petroleum products imported into the country. This results in long delays before ships offload products, which in turn leads to high demurrage costs, and in some cases, supply disruptions," said Athmani.
She added that the firm is also working on setting up the strategic petroleum reserves, which are meant to help the country absorb frequent shocks that are usually experienced in terms of shortages and rise in prices.
The company is, however, yet to determine when it will begin setting up the petroleum reserves. Athmani said the reserves will be embedded in the national petroleum master plan, which Nock plans to start developing next year.
Lack of funds
Plans for the strategic petroleum reserves have been in the offing since 2008, but have been put off for several times due to lack of funds. Athmani said Nock was considering public private partnerships and infrastructure bonds as a means to raise funds for putting up both the petroleum reserves and the jetty.
"We are currently carrying out technical and financial feasibility studies for the projects and going forward, we are going to explore a mix of financing options, with focus on the leaser cost model for financing the projects," she said.
