Economy

State cuts Turkana oil export period on reduced stock

dn crude

Petroleum chief administrative secretary John Mosonik (right) and other receive the crude oil offloading pipe at the Kenya Petroluem Refinery in Changamwe on June 7, 2018. PHOTO | LABAN WALLOGA

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Summary

  • Kenya will look for buyers once trucks stockpile 200,000 barrels of crude at the Mombasa Port.
  • This is half the stockpile of 400,000 that the State had earlier announced before the kick-off of shipments.
  • It means the export date will be brought forward as opposed to the first quarter of 2019 as earlier estimated.

Kenya seeks to bring forward the export date for its early oil following the decision to ship out half the planned amount of the first stored cargo.

Petroleum chief administrative secretary (CAS) John Mosonik said the country will look for buyers once trucks stockpile 200,000 barrels of crude at the Mombasa Port.

This is half the stockpile of 400,000 that the State had earlier announced before the kick-off of shipments.

It means the export date will be brought forward as opposed to the first quarter of 2019 as earlier estimated.

Mr Mosonik on Thursday oversaw the arrival of the first four trucks with crude at the Mombasa defunct refinery which has been converted into a storage facility. The trucks were flagged off by President Uhuru Kenyatta on Sunday.

It marked the kick off of the early oil export scheme (EOPS) that has dragged on since mid-last year.

The small-scale export plan aims to test the global supply logistics and determine the price-point for the Turkana oil.

Up to 110 trucks will haul some 2,000 barrels of oil per day under the early oil export plan.

READ: President Kenyatta flags off Kenya's first crude oil exports

Each truck has a capacity to haul 150 barrels of crude and will take 10 days to do a round-trip. It will be stored at the ageing refinery.

“Some of the completed works in this depot is the modification and insulation of the receipt tank with a capacity to hold 90,000 barrels, two adjacent truck unloading bays, a steam boiler for line heating and re-heating the crude oil trucks if necessary,” said Charles Nguyai, the CEO at the Kenya Petroleum Refineries Ltd (KPRL).

Oil movement will be by road for about two years ahead of the construction of an 865-kilometre crude pipeline that will allow commercial shipments.

Kenya’s recoverable reserves are estimated at 750 million barrels of crude and considered commercially viable.

Oil looks set to diversify the country’s exports, boost hard currency inflows and ultimately make imports like cars and machinery more affordable.