KPC targets counties in new distribution network expansion

The Kenya Pipeline Company (KPC) has announced plans to extend its current distribution network to counties, raising hope for a stable supply as the country devolves its industries.

The firm has invited bids for feasibility studies for preliminary design and identification of viable depot locations in western region, south Nyanza, south rift, lower eastern and mount Kenya.

“The company owns and operates 1,221 kilometres of pipeline network and it intends to extend this network to various parts of the country in line with its corporate strategic plan,” acting Managing Director, Joe Sang said on Wednesday.

KPC currently has depots at the Nairobi terminal, Jomo Kenyatta International Airport (JKIA), Mombasa International Airport, Kipevu, Nakuru, Kisumu and Eldoret with a combined capacity of 612.33 million litres. All the seven depots are linked to its main pipeline network.

The oil firm is currently constructing a new and wider 122km pipeline between Kisumu and Sinendet to meet an increased demand for petroleum products in the western region.

The company last September said it plans to lease oil storage facilities from private investors in Nairobi and Mombasa to improve product distribution and supply.

The KPC said it targets to lease already operational terminals in Nairobi and Mombasa with a capacity of 30 million litres and 100 million litres, respectively.“The terminal must be fit for purpose for immediate use,” the company said as it called for bids by interested terminal owners.

Several private firms such as Vivo, KenolKobil, Hashi Ampex, Petrocity, Gapco and Total Kenya have petroleum depots and terminals in Nairobi and Mombasa.

Investors and marketers are currently deprived of reliable storage to suit their demands to service East Africa and its hinterland.

Extra storage is critical to oil marketers in the region because of thin profit margins from sales. In fragmented markets such as East Africa’s, bulk supplies hold the key to profitability.

The Energy and Petroleum ministry in September 2014 took over the management of a private oil terminal in Kipevu, Mombasa, raising hopes of lower storage penalties for oil marketers, which will ultimately lower product prices.

The KPC now runs the facility owned by international storage logistics firm VTTI under a five-year lease deal.

The newly leased facility provides an alternative to the strained national storage tanks at the State-owned Kipevu Oil Storage Facility, which have been blamed for high demurrage charges.