Kenya's eyes 2027 crude oil export as KPRL facility upgrade gathers pace

The Kenya Pipeline Company (KPC) is set to undertake major refurbishment works at the Changamwe-based Kenya Petroleum Refineries Ltd (KPRL) to play a critical role in the storage and later export of the Lokichar crude oil.

KPC expects some of the works to be completed by November, ready to start receiving crude oil from the Turkana oil fields. Gulf Energy plans to start commercial oil production in December.

The pipeline company also expects some of the facilities that would facilitate the pumping of crude oil from its storage tanks to vessels for export to be completed by the end of January 2027, in time for Gulf to start exporting oil in the first quarter of 2027.

KPC in August started  looking for a contractor for the rehabilitation and modification of the crude oil receipt, storage and export facilities at KPRL in Changamwe, Mombasa.

While all the works are expected to be completed within 12 months, the company has set tight deadlines for the completion of some of the infrastructure that would pave the way for Kenya to export its first batch of crude oil in early 2027.

In the tender documents, KPC requires “the bidder to make a commitment to complete the works required for first crude oil receipt by November 30, 2026".

Among the works required to have been completed by then are the rehabilitation of the boiler and steam system, the completion of one of the tanks and the construction of interim truck offloading bays.

It also requires the contractor to commit to complete refurbishing three other tanks, export pipeline works and flushing system by January. The latter facilities, KPC said, would be “required for first crude oil export by January 31, 2027”.

KPC started the search for a contract on August 5 in a tender process that closes on September 5, after which it expects to select the company that will undertake the works.

KPC acquired KPRL in 2023, with plans to use its petroleum infrastructure to increase the country’s storage capacity. The refinery ceased crude oil refining operations in 2014 and was in 2017 taken over by KPC through a lease agreement allowing it to use KPRL’s expansive infrastructure before the acquisition three years ago.

The refurbishment of the KPRL facilities will be the first major investment that KPC will make post the Initial Public Offering (IPO that was concluded in March this year, which resulted in the company being majority owned by private firms.  The government holds what it terms a 35 per cent strategic stake, while the balance is held by a mix of institutional and retail investors, including a 20 per cent ownership by the Uganda National Oil Company (Unoc).

The need to upgrade the oil storage and other facilities at KPRL follows the abandonment of plans to build the 892-kilometre crude oil export pipeline between Turkana and Lamu proposed by Tullow Oil in favour of Gulf Energy’s proposal to transport crude oil to Mombasa by road. Gulf Energy took over the oil project from Tullow in a deal completed in September 2025 and valued at $120 million (Sh15.6 billion).

Gulf plans to dispatch 100 trucks per day, transporting about 20,000 barrels of crude oil to Mombasa by road. It expects to use trains in later phases. The crude oil will then be stockpiled at KPRL and exported when it accumulates adequate quantities to fill a ship.

In using storage facilities at KPRL, Gulf Energy will pay KPC a fee. The two firms recently signed a 25-year crude oil storage  and handling contract that is projected to generate up to Sh93.68 billion in gross revenue for KPC.

Under the contract, KPRL will provide facilities and services for the "receipt, storage, handling and delivery of crude oil for export through Kipevu Oil Terminal II (KOT II)", the deep-water jetty at Mombasa port capable of loading crude onto tanker ships for international markets.

In its Field Development Plan (FDP), Gulf Energy said it requires some 143,000 cubic metres of storage capacity at KPRL, enough to store 900,000 barrels of crude oil.