Kenya Pipeline Company to put up Sh12.5b plants to boost cooking gas use

Cooking gas cylinders. KPC is planning to build cooking gas plants worth Sh12.5 billion. [File, Standard]

Kenya Pipeline Company plans to build facilities worth $125 million (Sh12.5 billion) to handle and store Liquefied-Petroleum Gas (LPG) with a view to boosting cooking-gas use in the rapidly urbanising nation, Managing Director Joe Sang said.

The government has scrapped Value Added Tax (Vat) on cooking gas and has subsidised the cost of 6kg cylinders in a bid to make the fuel more affordable and attractive for its citizens, most of whom prefer cheaper charcoal, firewood and kerosene.

For city dwellers, LPG is more convenient and currently used by 30 per cent of Kenyans living in urban areas. The total number of people living in towns is expected to quadruple by 2045, according to the World Bank.

“It will enhance the current inadequate LPG supply, distribution and storage infrastructure, as well as increased utilisation of clean energy,” Sang said in an emailed response to questions.

Kenya’s monthly LPG consumption ranges from 15,000 to 23,750 metric tonnes, according to the Energy Regulatory Commission.

Regional demand

The government wants to increase usage to 15kg per person by 2030 from about 4kg currently.

State-owned KPC is evaluating bids for the building of the plants, one in Nairobi, and the other in Kenya’s second-biggest city, Mombasa. Construction is scheduled to begin in October and the facilities will be ready by the end of December 2020, Sang said.

The $65 million (Sh6.5 billion) depot in Mombasa will have capacity to store 25,000 tonnes of gas, rail and truck loading, and bottling facilities. The company plans to double the storage capacity once the plant is operational to meet regional demand from landlocked countries.

Nairobi’s $60 million (Sh6 billion) plant will have a capacity to store 10,000 tonnes of gas, and equipment to refill cylinders.

The facilities will be Kenya’s first publicly owned cooking-gas terminals and will secure stability of supplies for the region, as well as diversify KPC’s revenue sources, Sang said.