8 firms in waiting to clinch oil pipeline tender

Delay in putting in place the 892km crude oil pipeline could further put on hold plans for the commercial oil export phase of the Turkana oil project. [Photo: Courtesy]

The Energy and Petroleum Ministry has started the search for a firm to design the planned 892km crude oil pipeline between Turkana and Lamu.

The ministry said it had invited eight firms to bid for the tender to undertake the Front End Engineering Design (FEED), which entails feasibility studies and an initial design, for the pipeline that will move crude from the oil fields in Lokichar to Lamu Port for export.

The engineering and design are expected to inform the specifications of the pipeline as well as how much it will cost the country.

The ministry has in the past said the pipeline could cost as much as Sh200 billion.

Principal Secretary Andrew Kamau last week the eight companies were selected from a pool of contractors that had submitted applications to be prequalified to undertake the FEED after the ministry sent out a request for Expression of Interest (EOI) in 2016.

“The firms who made it through the expression of interest were invited to tender and these were a total of eight companies. They will be awarded the contract by end of April and take about eight to nine months to complete the FEED,” he said.

The ministry had expected to award the contract for the FEED mid last year, which would have paved the way for the development of the pipeline later this year and have it completed in 2020.

Set out roles

Delay in securing a firm to design the pipeline could further put on hold plans for the commercial oil export phase of the Turkana oil project.

PS Kamau said construction works on the pipeline would start next year and take two years to be completed.

The delay was in part due to the time in negotiating and signing the Joint Development Agreement (JDA) between the ministry and Tullow Oil together with its partners in the project in Lokichar.

The JDA provided a legal framework for the development of the pipeline, setting out the different roles for Government as well as the joint venture firms.

Other than the FEED, there are also plans to start Environmental and Social Impact Assessment (ESIA), which is expected to start by the end of March.