INFRASTRUCTURE

New Kipevu Oil Terminal key for LPG uptake –PIEA

LPG storage capacity in the country is at about 6,000 metric tonnes against a consumption demand of 300,000 metric tonnes.

In Summary
  • The new terminal will have the capacity to handle four vessels of up to 100,000 Dead Weight Tonnage and will have a dedicated Liquefied Petroleum Gas(LPG) line.
  • PIEA general manager Wanjiku Manyara says the new Kipevu terminal will boost the country's LPG handling capacity.

 

 

A Gas vessel approaching at the port of Mombasa on August 18,2016./FILE
A Gas vessel approaching at the port of Mombasa on August 18,2016./FILE

The Petroleum Institute of East Africa(PIEA) wants the construction of the new Kipevu Oil Terminal (KOT) fast tracked to promote increased uptake of Liquefied Petroleum Gas(LPG).

This is in the wake of a renewed government campaign to adopt use of clean energy by households, while discouraging over reliance on kerosene, firewood and charcoal, which are blamed for high rate of respiratory diseases.

State energy agencies, led by the Energy and Petroleum Regulatory Authority(EPRA), are also implementing the new LPG regulations gazetted on June 25, that seek to streamline the industry.

 

              PIEA general manager Wanjiku Manyara said the new Kipevu terminal will boost the country's LPG handling capacity and support ongoing investments by manufacturers to produce gas cylinders locally.

“The new KOT will feature a dedicated LPG import pipeline which is a necessary capital investment and strategic action that will facilitate the operation of corresponding storage facilities in Mombasa,” Manyara told the Star yesterday.

She said some firms have already set shop in Kenya to manufacture cylinders noting that all the investments will help meet the market demand.

Kenya Ports Authority (KPA) is the contractor of the new terminal which will see the current 50-year old Kipevu Oil Terminal relocated to a new site on the southern side of the port (near Dongo Kundu), opposite the current container terminal.

China Communications Construction Company(CCCC) is developing the new KOT.

KPA management yesterday told the Star works at  project is at 21 per cent.

“We are ahead of schedule. Dredging was completed at the end of November. We are now pilling as per the construction plan,” KPA managing director Daniel Manduku told the Star on phone.

Marine piling is the process of building deep foundations into the ground below sea level to support buildings and structures that are offshore.

 

The new terminal will have the capacity to handle four vessels of up to 100,000 Dead Weight Tonnage and will have an LPG line that is expected to help stabilise gas supply in the country.

The government plans to put up LPG storage and handling facilities in Mombasa, Nairobi and Eldoret , with the help of oil marketers in collaboration with Kenya Pipeline Company (KPC). This is expected to help meet growing demand  locally and regionally.

Industry data puts total LPG storage infrastructure capacity in the country at about 6,000 metric tonnes against an annual consumption demand of 300,000 metric tonnes.

“LPG is very important for the future of this country. At KPC, we want to play a major role in supporting increased uptake of the commodity,” KPC chairman John Ngumi told the Star on phone.

Plans are also in place to have a common user gas storage facility. The government will then issue single monthly gas tenders, similar to the Open Tender System (OTS) in oil, where a marketer is given the right to import on behalf of the entire industry.

The latest developments come as the EPRA moves to implement new regulations on LPG, that include dealing on cylinders by LPG wholesalers, retailers and transporters.

The players are required to acquire a licence from the authority for each business location and shall deal with specific cylinder brands.

(They) shall henceforth not undertake the business of retail, wholesale or transportation of cylinders of another brand owner without prior written consent from the brand owner, failure to which it shall be considered as an offence,” EPRA director general Pavel Oimeke said.

The Consumer Federation of Kenya(Cofek) yesterday however faulted EPRA, saying the move will shrink the LPG market with multinationals being left to exploit consumers.

“It will erode the gains we have made in ensuring LPG is available all over the country. Shortage of gas will be common,” said secretary-general Stephen Mutoro.

Meanwhile, PIEA is pushing for introduction of piped LPG gas into housing units.

Approximately 21,500 deaths occur annually due to respiratory diseases, with 40 per cent of Kenya’s health burden caused largely by indoor pollution due to cooking with firewood, charcoal and kerosene, a preventable health burden.

“Charcoal, firewood and kerosene used as a source of fuel can cause a lot of respiratory diseases. Majority of those affected are women and children,” Manyara said.