Upgrade Planned for East Africa's Kenya Refinery and Pipeline Network

---

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--A $1.2 billion overhaul and upgrade to Kenya's sole oil refinery could follow the decision to keep the ageing Mombasa plant operating after public and industry protests forced the government and its co-owner, Indian-controlled Essar Energy plc (Port Louis, Mauritius), to withdraw the threat to close it down.

Pressure to bring the plant up to operating efficiency also comes from East Africa. The region anticipates that growing activity in its oil and gas production sectors will turn it from a fuel importer to an exporter. The refinery has been processing 4,500 tons of oil and producing about 32,000 barrels of fuel per day (BBL/d), but this output has dropped to 2,500 BBL/d, caused by a drop in sales due to disenchanted oil marketers.

The Energy Regulatory Commission (ERC) has suggested that the refinery could be converted to a storage facility if the cost of upgrading proves too high. In April, Essar said that the upgrading and expansion could expand capacity to 4 million tons annually, equivalent to 79,000 BBL/d by 2018, from the current 1.6 million tons,

This week, government officials from Uganda, Kenya and Rwanda agreed to build two pipelines through the region. The first will run from South Sudan to Lamu on the Kenyan coast; the second will run from Rwanda through Uganda to Mombasa, and will transport product in both directions.

Uganda plans to develop its own refinery to feed domestic demand and to process oil from its developing oil fields.

For related information, see June 6, 2013, article - Toyota Tsusho to Construct South Sudan $4 Billion Lifeline to Kenya Coast, and April 17, 2013, article - Uganda Refinery Project Opts to go Smaller, Adds Export Pipeline.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.