Sh48 billion oil pipeline nears completion

The Government is optimistic that the completion of a multi-billion-shilling petroleum pipeline later this month will cut down the huge charges caused by ship delays at the port of Mombasa.

President Uhuru Kenyatta is expected to commission the Line Five pipeline between Mombasa and Nairobi before end of this month.

It was constructed at a cost of Sh48 billion to increase Kenya’s pumping capacity from the port to the hinterland.

Petroleum and Mining Cabinet Secretary John Munyes said yesterday Kenya will reduce the Sh10 million per day demurrage charges at the port as ships are forced to wait in the high seas for several days due to limited uptake of petroleum products.

The new line will raise the current pumping capacity from 730,000 litres per hour to about three million litres.

“The new pipeline will reduce the cost of vessels which are kept waiting in the highs seas.

“It is very costly to keep ships lining up in the high seas,” said Mr Munyes.

Speaking at the Kenya Pipeline Company (KPC) terminal in Mombasa, the CS said there was a huge challenge of storage capacity for petroleum products particularly in Mombasa and Nairobi which require huge investments.

He said Kenya should create three times its current capacity to meet internal demand.

KPC Managing Director Joe Sang said although the new pipeline was set to be commissioned last year, it delayed so as to address integrity issues in the infrastructure.

Quality products

“The pipeline is expected to transport quality products. We cannot also take chances on any safety issues and hence we had to carry out integrity tests,” he said.

Munyes said the new pipeline will make Kenya more competitive in the distribution of petroleum products in the region.

“We want to be a more competitive nation. We also want to be more reliable to our neighbours,” he added.