Ola, Mahadi set their sights on share of LPG business

Two oil marketers are seeking regulatory approvals to tap into the liquefied petroleum gas (LPG) business as demand for clean sources of cooking fuels grows.

Mahadi Energy Limited and OLA Energy Kenya are seeking clearance from the environmental watchdog to construct and operate an LPG terminal depot with a total storage capacity of 15,000 tonnes of LPG as well as expand the Marine Terminal respectively.

The two firms have submitted Environmental Impact Assessment (EIA) reports to the National Environment Management Authority (Nema) for approval prior to construction of the LPG plants.

“The proponent, Mahadi Energy Limited, proposes to construct and operate an LPG terminal depot with a total storage capacity of 15,000 metric tonnes of LPG held in 9 mounded tanks of 1,650 tonnes each,” Mamo Boru Mamo, the Nema Director-General said in a gazette notice.

The Mahadi terminal depot will consist of LPG truck loading bays, office block with two floors, generator room, fire water tank, a 600-meter-high LPG evaporation wall, associated facilities and amenities on Plots L.R. Nos. MNNI/4689 and MN/VI/2428, Port Reitz Area, Mombasa County.

Nema said it had also received an Environmental Impact Assessment Study Report from OLA Energy Kenya Limited which proposes to expand the Marine Terminal.

The two oil firms are seeking to join a list of investors eyeing a pie of growing demand for the commodity across Kenya and the larger East African region.

There has been a rise in demand for LPG in the past five years which saw 2019 register a 40.4 per cent increase at 312,100 tonnes compared to 222,300 tonnes that was consumed in 2018.

The rise follows subsistence of a logging moratorium now in its third year that outlawed charcoal burning in public forests thereby creating demand for alternative fuel energy sources especially for urban dwellers.