A Sh700 million liquefied petroleum gas (LPG) import hub will be built in Mombasa to cash in on increased demand for the commodity across Kenya and the larger East African region.
Lionsgate Gas and Oil Limited says it is ready to start construction on its three acre plot.
In regulatory filings, Lionsgate Gas said they plan to put up three liquefied petroleum gas bullets totalling 2,500 tonnes as well as auxiliary facilities.
“The concept of facilities handling liquid hydrocarbons and mixtures thereof meets the highest requirements in terms of fire protection and operational safety and user-friendliness of the complete automated plant,” it adds.
The investment following a growing demand for LPG in the past five years where last year registered 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 logging and charcoal burning in public forests thereby creating demand for alternative fuel energy sources especially for urban dwellers.
According to the 2020 economic review, the rise in demand is partly attributed to significant increase in illuminating kerosene retail prices that the state believes will discourage adulteration of diesel.
The latest, Petroleum Institute of East Africa(PIEA) indicate 53.6 percent of urban dwellers rely on LPG fuel with 27 percent still buying charcoal albeit at high prices compared to 92 percent of rural dwellers who use charcoal and firewood sources with only 5.9percent using LPG.
The environment impact assessment study vouches for Lionsgate Gas project saying it will add availability of cooking gas in the country and its neighbouring countries.
It adds jobs will be created during construction phase and more people employed once the facility becomes operational by year end.
Lionsgate project is now awaiting a nod from the National Environmental Management Authority (Nema) on whether to continue or not after the end of the 30 day public participation window.