National Oil Corporation of Kenya (Nock) has put on sale its multi-million shilling Nairobi petroleum depot, just eight years after expanding the facility to match growing fuel storage demand.
The State-owned oil marketer said it had received a bid for an outright acquisition of the terminal that also has a truck loading facility and a warehouse.
“In this regard, National Oil is interested in engaging the services of a reputable transaction adviser to come up with a suitable valuation of the facility as well as guide the corporation during the transaction,” the Nock said in a call for bids without giving details.
The terminal built in 2004 is located on Nairobi’s Nanyuki road and sits on a five-acre parcel of land. The terminal has fuel storage tanks with a capacity of 4.5 million litres that are linked to the adjacent depot owned by Kenya Pipeline Company (KPC).
It also has a liquid petroleum gas filling plant that can store 130 tonnes of product and a cylinder storage shed. KPC managing director Joe Sang said they would be bidding for the Nock depot.
“National Oil, therefore, intends to enter into a sale or long term lease transaction for this facility with the identified bidder,” Nock further said.
It was not immediately clear why Nock planned to sell off the depot or lease it out yet it remains in the petroleum fuels marketing business.
Nock managing director Jane Mwangi declined to comment on the intended sale or lease out of the facility when contacted by the Business Daily.
Oil firms are in a race to expand their petroleum product storage capacities amid growing consumer demand and profit pressures.
Petrol consumption in Kenya surged nine per cent to 415.2 million litres in the first quarter of the year, an average of 138 million litres per month, while diesel intake rose four per cent to 622.9 million litres, or 207 litres monthly.
Kerosene sales grew nine per cent to 142.6 million litres in the year to March, translating to 11.9 million litres a month, according to data from Petroleum Institute of East Africa.
At least 144 million litres of active storage capacity was added to the market within four months to February 2016, boosting reliability of consumer supplies and improved profit prospects for marketers.
Oil marketer Vivo Energy in November 2015 unveiled a 14-million litre extra storage capacity at its depot in Shimanzi, Mombasa as it set its sight on further expansion of its retail network in Kenya.
Vivo Energy built a new fuel storage tank and upgraded another at its depot in Shimanzi, pushing its overall holding capacity of petrol to 22 million litres.
The KPC also expanded its product storage capacity through leases of existing depots in Mombasa and Nairobi.