Refinery gets Sh21 billion to transform into oil merchant
THE Kenya Petroleum Refineries Limited yesterday received close to Sh21 billion (US$250 million) to help it transform into an oil merchant. The cash injection from Standard Chartered Bank Plc will see the refinery transforming from its current status of processing oil for oil marketers to buying its own crude oil and then selling it to marketers. “This facility will be utilised for our working capital requirements. We will now be able to buy oil, process it and sell the petroleum products to marketing companies,” said KPRL chief executive officer Brij Mohan Bansal during the signing of the financing agreement.
The agreement was signed between KPRL and Standard Chartered Plc regional head of origination and client coverage Robin Bairstow and witnessed by Patrick Nyoike, the Permanent Secretary, ministry of Energy. Following the agreement KPRL will now be able to source for more economical crude oils or crude oil blends from other non-traditional sources.
The refinery currently produces 1.6 million metric tons per annum. With the upgrade, it would not only process the Murban crude from Abu Dhabi, in the United Arab Emirates, but it will also be capable of handling crude oil from cheaper sources. “We are doing the best for the consumer. They will be benefiting from this enhanced efficiency because we would be able to buy from the best-suited crude oil suppliers,” Bansal said. He said they will focus on serving the Kenyan market first.
Meanwhile the refinery said it expects to commission its own 9.2 megawatt power plant in September, a date which is later than the March 2012 announced late last year. KPRL last year signed a Sh1.25 billion ($13.5 million) financing deal with Barclays Bank of Kenya for the construction of the power plant in Mombasa. The power plant will eliminate the frequent power interruptions that result into fuel supply distortion in the country. KPRL which spends an estimated Sh50 million on power bills every month is also hoping to reduce this cost with its own plant.