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Economy

Tullow setting up plant to process early oil exports

An oil rig at Ngamia 1 exploration site in Turkana. File photo | nmg
An oil rig at Ngamia 1 exploration site in Turkana. File photo | nmg 

British oil explorer Tullow has started setting up equipment in Turkana oilfields to separate crude oil from impurities in readiness for early exports this year.

The company will pipe oil from its wells across the fields to the early production facility, which will separate crude oil from other fluids like water and gas that are pumped out together.

The temporary facility, located at Amosing well, will be in use for two years, a period during which road trucks will transport 2,000 barrels of the black gold daily to Mombasa port for early exports.

Thereafter, with the construction of a Sh210 billion Turkana-Lamu pipeline, the company will set up a permanent central processing facility that will process up to 80,000 barrels daily for exports.

Tullow Oil contracted Dubai-based Almansoori Petroleum to supply the early product facility at a cost of Sh1.01 billion ($10 million).

“The South Lokichar basin appraisal programme has confirmed material oil resources to support substantial oil production and an export pipeline to the Kenyan coast pending a final investment decision, which is planned for 2019,” the firm said in a statement.

The explorer initially struck oil in Turkana’s Lokichar basin in northwest Kenya in 2012, and has since followed it up with a string of other finds, putting the country on the path to becoming an oil producer.

The recoverable reserves are estimated at 750 million barrels of crude, considered commercially viable.

Kenya last July delayed a plan to start small-scale crude oil production of 2,000 barrels per day for transportation to Mombasa by road and loading on ships for export.

The country is banking on oil exports to earn the much-needed petrodollars it hopes will help stem the rising tide of public debt that stands at half the gross domestic product.

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