Politics and policy
Kenya plans pipeline to Arusha after oil discovery
Posted Sunday, August 12 2012 at 16:43
Kenya plans to construct a pipeline to supply oil to neighbouring Tanzania once it starts commercial exploitation of reserves recently discovered in Turkana County.
Energy minister Kiraitu Murungi said the pipeline would link Nairobi to Arusha, with supplies being pumped from a refinery to be built in Isiolo.
A new pipeline will also be built to link the refinery in Isiolo to Nakuru for onward distribution of products to Eldoret and other parts of western Kenya and northern Uganda. Another pipeline would be constructed to connect the refinery to Nairobi.
“We shall talk to the government of Tanzania to see how we can supply them through a pipeline to Arusha,” Mr Murungi told a media briefing in Nairobi on Friday after a meeting with South Sudan officials.
The officials were in Nairobi to review progress on a planned oil pipeline to link the port of Lamu and oilfields in South Sudan—the newly independent country.
Tanzania has recently struck huge reserves of natural gas but is yet to find oil. Kenya, however, has found large reserves of oil in Turkana’s Ngamia-1 well although tests are ongoing to establish its commercial viability.
The minister said the government would focus on satisfying demand in Kenya and region through products refined at the facility planned for Isiolo.
“We hope to make Isiolo a hub for refined products both from Kenya and South Sudan. Our prime concern will be to satisfy the domestic needs and those of the region. Any excesses will be pumped and exported through the port of Lamu,” he said.
Energy permanent secretary Patrick Nyoike said feasibility on the planned refinery in Isiolo would commence soon.
“We are looking at a refinery with a capacity of processing a minimum 100,000 barrels a day because any capacity below that would not be economically viable,” he told the Business Daily.
Mr Kiraitu said construction of the 2,000 kilometre South Sudan-Port of Lamu pipeline is expected to begin in June next year and completed in two years at a cost of $3 billion. A turn-off branch is also scheduled for construction to link Ethiopia. “We expect the pipeline to be up and running by June 2015,” the minister said.
South Sudan’s minister for Petroleum and Mining, Stephen Dhieu Dau said his government was committed to the construction of the joint pipeline with Kenya.
“This project will help change the face of the region and the lives of the people of Kenya and South Sudan,” he told the media briefing.
He said South Sudan planned to increase its production capacity from 350,000 barrels per day to about one million.
“We are working to offer incentives and an enabling environment for investors so that this project would succeed,” Mr Dau said.