New oil pipeline fails to retire 700 oil tankers off the road

Oil tankers parked along Naivasha road in Industrial Area, Nairobi. [File, Standard]

Before commissioning of the new pipeline, the Kenya Pipeline Company (KPC) bosses told Kenyans that the line would play a critical role in decongesting the country’s major roads.

Among the prominent messages in its communication materials was that the pipeline would remove 700 trucks per day from the busy highway that have been ferrying fuel from Mombasa to Nairobi and other hinterland towns for oil marketing companies.

The promise, however, appears not to have materialised with the petroleum products transported through the pipeline network has only grown by a partly 2.7 per cent.

The pipeline had been in use for the second half of 2018 and its impact was supposed to have been immediate.

In fact, the Energy Regulatory Commission (ERC) stopped factoring in the Sh1 per litre paid to truckers by oil marketers in the fuel pricing formula.

According to the Kenya Economic Survey, the petroleum pipeline network run by the KPC only increased the volume of fuel products it transported in 2018 by 2.7 per cent.

While this includes other pipelines that move the products past Nairobi, the infrastructure piece serving Nairobi and Mombasa accounts for the bulk of the fuel transported through pipelines. The commissioning of the pipeline mid-2018 and subsequent operationalisation should have seen a surge in the amount of fuel carried by the new line. “Total pipeline throughput increased by 2.7 per cent from 6.2 million cubic metres in 2017 to 6.3 million thousand cubic metres in 2018,” said the Survey.

“The construction of a new 20-inch diameter refined petroleum pipeline (Line 5) from Mombasa to Nairobi with four new pump stations was completed in July 2018. It has a current installed flow rate of 1,000 cubic metres per hour with provision for enhancement of the flow rate to 1,863 cubic metres per hour by 2023 and to 2,638 cubic metres per hour by 2044.”

Line 5 – as the new pipeline is referred - replaced the archaic and dilapidated Line 1 that was prone to leaks and on numerous occasions dealt many shocks to fuel supply in the country resulting in shortages.

The 14-inch line had a flow rate of 440,000 litres per hour but was upgraded to 880,000 litres per hour, which was however never achieved.

Instead, the flow rate reached 550,000 litres per hour.

“With a one million litres per hour flow rate, the new line will remove an average of about 700 trucks from the road daily at maximum utilisation. This will enhance safety because pipeline transportation of fuel is the safest and most cost effective way of transporting petroleum products the world over,” said KPC as it geared up to commissioning the new pipeline.

“There will, therefore, be no tanker accidents, fuel fires, siphoning on our roads hence saving lives and conserving our environment.”

Head of Petroleum Directorate at the Ministry of Petroleum and Mining James Ng’ang’a, however, said that the new pipeline is still attracting demand, just as is the case with other new projects that take time before they achieve full utilisation.

“Demand grows with time. It also takes time to fill the pipeline when it is new and nobody wants to fill the pipeline and store their oil there and the Government does not have funds to buy the products to fill the pipeline, it has to be the marketers who have to buy the fuel,” he said.

“It took time before the marketers could fill up the pipeline with products. That delay might have affected the utilisation. The marketers have not started to fully utilise the pipeline which is seen in the current flow rate of between 800 and 900 cubic metres per hour against the expected 1000 cubic metres per hour.”

Before operationalisation, the pipeline required to have petroleum products that would permanently remain within the system what is referred to as line fill volume.

This is necessary to make it easy and hasten the flow of products between Mombasa and Nairobi as it would take much more time and other resources, including energy, to push products when the pipeline is empty.

Leaving a minimum amount of products is a requirement for marketers using the pipeline.

KPC said it held talks with oil marketers who agreed to the contribution of 90 million litres of petroleum products as the minimum amount that would remain in the pipeline. This would translate to a contribution of Sh9 billion, going by the current retail rates of the super petrol, diesel or kerosene, which are transported using the pipeline.

This was shared out among the oil firms depending on their share of the market. KPC acting general manager operations and maintenance Joshua Mutea noted that the oil marketers prefer to use road transport, despite the availability of the faster and more efficient pipeline as well as storage.

“The removal of trucks from the road is by choice and not by law. If you look at the roads, there are so many trucks but at our depots, we do not have space to store products because they are full and marketers are not picking products.

We may have transported so much but off-take of that product or acceptability by traders to pick the products from the pipeline, which will translate as though the product has not been transported,” he said.

Mr Mutea said that there are many options being looked at to improve offtake through the pipeline.

“We can make better use of the pipeline. The pipeline itself is doing well in terms of performance. The flow rate is internment because at some point we can achieve a million litres per hour but when there is no more storage space because tanks are full, we have to stop pumping. At the end of the month, the average could be 800,000 litres per hour but not because the pipeline was not available to transport products but because marketers are not utilising it fully.”

He said there are discussions between KPC and the industry to improve uptake as well as make the pipeline competitive. We will reach an agreement that will see the flow rates get to the desired levels,” he noted

Line 5 has been dogged by controversies from the onset, among them claims by Zakhem International for additional payment for operational delays.