Kenya Pipeline Company (KPC) on Tuesday signed a Sh1.7 billion agreement for the construction of the Kisumu oil jetty.
The contracted was awarded to Southern Engineering Company (SECO), a 60-year old Kenyan company, specialising in engineering works.
This was after a competitive process that involved six local and foreign bidders.
SECO, a flagship company of Alpha Group’s marine division, will commence the construction this month and is set to complete the venture within six months.
KPC managing director Joe Sang said the jetty's completion will increase the pipeline’s competitive edge in the region as the leading oil transporter.
"The oil jetty’s target market will create an integrated marine fuel transportation in the region."
"This will make it more efficient and commercially viable as well as reduce transportation costs for oil marketing companies," Sang said.
The oil jetty’s target market will be around the lake and expanding the export market into Uganda and mines in northern Tanzania.
The project is expected to boost throughput in Kisumu by 1 billion litres a year in phase 1 and up to 3 billion litres per year by 2028.
"The jetty has been made possible following the completion of the new Sinendet-Kisumu pipeline," Sang said.
"The line has enhanced petroleum product availability in western Kenya and the export market of Uganda, Eastern DRC, Rwanda, Burundi and Northern Tanzania."
The pipeline, KPC says, has increased product flow to Kisumu depot to 350,000 litres per hour from the previous 110,000 litres per hour.
Sang said the jetty project will also turn Kisumu into a focal point of oil and gas trade in the region making it one of the busiest inland ports in Africa.
"KPC remains focused on becoming a major regional player supporting regional growth by lowering the cost of doing business."
KPC in January 2017 placed a notice in the dailies inviting companies to tender for construction of the Kisumu oil jetty.