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Opinion & Analysis

Kajiado gas discovery holds great promise for industries

An oil rig. So far, the Kajiado gas story is a good dream. FILE PHOTO | NMG
An oil rig. So far, the Kajiado gas story is a good dream. FILE PHOTO | NMG 

Last week, surprise news emerged from Kajiado County that a water drilling contractor had struck gas at a shallow depth of about 200 metres.

The location was said to be Kipeto, between Ngong Hills and Lake Magadi. The National Oil Corporation of Kenya (NOCK) has sent a sample of the gas abroad for analysis.

The news reminds me of a similar story about eight years ago when a water driller in Turkana is said to have come across what looked like oil.

It is understood that a sample was sent to the Mombasa refinery for analysis, and this may have set in motion the oil activities we have in the county today. This was, however, low key news that never hit the headlines but played out in our courtrooms.

The common denominator between the Kajiado and Turkana finds is that they are both situated in the same eastern branch of the Rift Valley where geological fissures may have led to hydrocarbons seepage to near the surface.

The western branch of the Rift Valley is home to discoveries of oil in Uganda and methane gas in Rwanda’s Lake Kivu.

The Kajiado gas-strike location is in the oil exploration block T14 allocated to the NOCK and stretches from the Tanzania border at Lake Natron to the upper parts of Nakuru County. This is also the home of the geothermal industry.

The parastatal has not fully explored the block but the gas strike at Kipeto will no doubt trigger immediate exploration and investment activities by the NOCK, probably partnering with better capitalised upstream investors.

The gas sample will likely test positive for either methane gas — the simplest form of hydrocarbons — or natural gas which includes methane and larger molecules. Deep in the ground, the gas could also be accompanied by crude oil, a likelihood that cannot be ruled out.

Let us for a moment engage in a wishful fantasy of a commercial natural gas discovery. This would be a very cost-effective hydrocarbon discovery by virtue of its vicinity to the core of energy demand markets. Transportation or transmission costs would be minimal.

Many will easily jump into power generation options for the gas, but I argue that priority should be going to industrialisation.

The neighbourhood heavy industries at Athi River (cement and steel) and the nearby Magadi Soda can use the gas to replace imported fuel oil and coal, saving foreign exchange while reducing carbon emissions.

The energy authorities will have to rethink their energy mix philosophy so that the first option for base load power generation is always reserved for geothermal which has limited alternative uses.

The second option for incremental base load generation should go to natural gas discoveries at distant locations with limited industrial opportunities when offshore exports are not viable. Kajiado gas prospects properly belong to industrialisation.

This is not the first time we have experienced false hopes on natural gas in Kenya. We already have stranded natural gas discovered in Marsabit Block 10A awaiting commercial evaluation.

About eight years ago a Chinese upstream explorer abandoned non-viable natural gas finds in Isiolo area, while the 2012 Mbawa gas discovery in the Indian Ocean failed the viability test.

However, looking forward, there are high hopes of striking good quantities of natural gas in Block L4 on Pate Island in Lamu where investors are understood to be preparing to undertake an exploratory drilling. Onshore Lamu is said to be a highly prospective natural gas zone.

Generally and for whatever reasons, natural gas generates less activism and politics than discoveries of crude oil. I guess this is because natural gas applications are very specific and more readily integrated directly into the wider economic mainstream and in public utilities.

Oil, being a traded commodity, is usually surrounded by intrigues, real and imagined.

So far, the Kajiado gas story is a good dream. Its reality can only materialise when drilling is undertaken and quantities are determined.

If quantities are commercial they can transform the region into an industrial hub with associated jobs. It would be a perfect example of a marginal semi-arid area adding economic value to Kenya.

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