Private sector players eye cooking gas market with planned storage facilities

Cooking gas [Courtesy]

Private companies are angling to benefit from growing use of cooking gas in the absence of investments by the State. They have already set up import and storage facilities at the coast.

The latest firm is Mansa East Africa, which is seeking the National Environmental Management Authority's (NEMA) nod to construct 10,000 tonnes of liquefied petroleum gas (LPG) handling facility.

This is the second firm to seek NEMA’s nod to build a cooking gas facility in Mombasa recently, after the Mombasa Gas Terminal (MGT), which plans to put up a Sh8 billion LPG handling facility.

There are limited LPG handling facilities in Kenya, which has exposed the market to supply shocks and stunted the growth of cooking gas consumption.

“The proponent, Mansa East Africa Ltd, is proposing to install a small-scale LPG import and storage plant of 1,000 tonnes capacity with an additional 10,000 tonnes floating storage,” said NEMA in a call for the public to give their views on the project.

According to disclosures the firm made to NEMA, the project is expected to cost Sh55 million. MGT, owned by Dubai-based Milio International, will spend Sh8 billion on a 22,000-tonne facility.

The firm has financing from the World Bank’s International Finance Corporation and United Kingdom’s Commonwealth Development Corporation.

Kenya Pipeline Company is also planning to develop an LPG facility that will serve all players importing LPG for the local market.

The facility will handle between 30,000 tonnes and 50,000 tonnes annually.

Kenyans consumed 189,000 tonnes of LPG last year, with expectations that this could reach 300,000 tonnes over the next five years.