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Economy

KPC plans to build cooking gas storage plant in Kajiado

A worker inspects gas cylinders. FILE
A worker inspects gas cylinders. FILE 

Kenya Pipeline Company (KPC) plans to put up a new liquefied petroleum gas (LPG) storage and bottling plant in Kajiado County to meet growing demand.

Procurement manager Nicholas Gitobu said the company is seeking a suitable 80-100 acre for the plant, preferably near the Nairobi-Mombasa railway.

“Interested landowners with unencumbered titles are invited to submit offers,” he said in a public notice Wednesday.

“The land must be fronting the railway line; between 0.5 kilometres to one kilometre along the railway line for operational purposes. It should be approximately 50 kilometres away from Nairobi city centre,” Mr Gitobu said.

KPC said the capacity of the project will depend on the size of the land.

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“Key aspects of the project such as capacity and even construction timelines will depended on the land factor. The size of the land will influence capacity while the project timeline will depend on how soon we get the land,” the company spokesperson, Jacinta Sekoh told the Business Daily.

A study conducted by the Energy ministry and the World Bank in 2005 recommended such facilities with a total capacity of 8,700 tonnes be set up in Nairobi, Mombasa, Kisumu, Eldoret, Nakuru and Sagana.

The study recommended development of facilities at Mombasa (6,000 tonnes), Nairobi (2,000 tonnes), Nakuru (150 tonnes), Eldoret (200 tonnes), Kisumu (300 tonnes) and Sagana (50 tonnes).

The cost of establishing the bulk LPG import handling, storage and distribution facilities in Mombasa was estimated at $28.6 million (Sh2.5 billion) while that of inland facilities was put at $43.3 million.

These budgets are, however, expected to be much higher now given the rise in the cost of construction materials.

Demand for LPG in Kenya and the east and central Africa region is constrained by lack of import facilities at Mombasa and a weak distribution network.

Kenya Bureau of Statistics data show demand for LPG in the country has increased in the last five years from 49,400 tonnes in 2005 to 93,600 tonnes in 2012, an 89.4 per cent rise.

The study said LPG demand in Kenya stood at 76,674 tonnes by 2010 and in other countries in the region at 17,105 tonnes. Storage capacity, however, was low at 3,960 tonnes comprising 1,250 tonne LPG tanks at the Kenya Petroleum Refinery, 1,300 tonnes at Shimanzi Oil Terminal and 1,410 tonnes owned by the oil marketers.

Besides boosting the LPG storage capacity, Kenya plans to invest up to Sh100 billion to develop a strategic national petroleum reserve to stabilise supplies.

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