Court reinstates gas firm's permit for Kilifi terminal

Lake Gas facility that is under construction in Kilifi. [File, Standard]

Liquefied Petroleum Gas firm, Lake Gas has scored a win after the Environment and Land Court in Malindi upheld the validity of its environmental licence when building a bulk cooking gas handling facility at Vipingo in Kilifi County.

The court set aside a ruling by the National Environmental Tribunal (NET) cancelling the firm’s Environmental Impact Assessment licence for the facility after it found that the project owners did not undertake adequate public consultation.

Lake Gas, a subsidiary of Tanzania’s Lake Group, had appealed the tribunal’s ruling at the Environment and Land Court. On December 10, Justice Evans Makori overturned the tribunal’s ruling and allowed Lake Gas to proceed with operations at the terminal. 

In setting aside, the ruling by the National Environmental Tribunal, Judge Makori observed that the project was already been completed, and had already started operations, and therefore, the order for cancellation of the EIA licence was a disproportionate and heavy-handed action, as it would have possibly meant the closure of the facility. The Court also faulted the applicants for filing the case at the tribunal late in the day, with the application coming four years after the project had commenced. The case had been filed by over 100 residents of Kilifi County.

“The orders cancelling the EIA license… is set aside because the appeal before the National Environmental Tribunal was filed more than five years after the license was issued,” said Justice Makori in a ruling on December 10.

While the Judge concurred with some aspects of the ruling by NET, including its conclusion that the procedures delineated for such a procedure were not adhered to, he also noted that the impact of cancelling the EIA licence would have meant the shutdown of the Lake Gas facility.  He argued against the closure, noting “the most effective remedy available to address any potential environmental challenges posed by the project is not its closure”, adding that environmental audits can address post-licensing environmental concerns

“Demanding the appellants to apply for a new EIA License would be an exercise in futility, as Section 58 of EMCA is intended to regulate new projects as well as existing projects seeking to expand or alter their operations,” said Makori.

Environmental requirements

He however directed Vipingo Development Ltd, the land owner, to undertake audits to ensure that the Lake Gas facility has been adhering to the environmental requirements.

“Instead, it is ordered that, pursuant to section 68 of the EMCA, the sixth respondent (Vipingo) is hereby directed through an order of mandamus to conduct an audit to confirm that the appellant’s (Lake Gas’) project operations align with the statements and predictions in the initial EIA study report,” said Justice Makori.

“The order also requires confirming that the project proponents have taken all reasonable steps to mitigate unforeseen negative environmental impacts not identified in the initial EIA, if any. The exercise shall be completed within the months hereof, and a report shall be filed in court.”

Lake Gas put up a 22,000-tonne LPG import facility at Vipingo, Kilifi County. The owners say it is aimed at increasing competition and potentially lowering the price of cooking gas in Kenya by increasing import handling capacity.

The facility, which started operations earlier this year, is emerging as a major player in the country’s bulk LPG infrastructure segment. “For our customers, this ruling is especially important.

It ensures that the Lake Gas Vipingo terminal remains operational and able to deliver affordable, safe, and consistent LPG,” the firm said in a statement, adding that since starting operations, the terminal has received four LPG vessels and established a dependable import cycle of 10,000 tonnes every 10 to 15 days.  “The presence of Lake Gas in Kenya’s LPG import and storage market has been a major win for consumers. By boosting national and regional storage capacity and strengthening supply security, we have helped drive LPG prices down by more than 30 per cent, making clean cooking fuel more accessible to households, businesses, and industries in Kenya and the region.”

The National Environmental Tribunal in March this year cancelled the environmental permit issued by the National Environment Management Authority (Nema) in December 2019 after finding that the project proponents did not undertake sufficient public consultation with local communities.

The residents had argued that due to lack of public consultations, they could not express the concerns they had, including fears of possible marine discharge and pollution, as well as concerns about the facility’s proximity to residential areas and a lack of proper safety infrastructure.

The uptake of cooking gas has been on the rise in the last decade, growing from about 93,600 tonnes in 2012 to 414,000 tonnes last year. It is expected to further grow as the government pushes for the uptake of LPG in state institutions, including some 11,000 schools.

These measures are expected to increase per capita consumption to 15 kilogrammes by 2030, which will be more than double the current per capita consumption at about seven kilogrammes.