Kisumu Oil Jetty viability remains strong

Kenya Pipeline Company is set regain its share of the East African petroleum market following commencement of transportation of fuel across Lake Victoria.

Over the last several months, KPC’s Kisumu Terminal has been used to load wagons on the wagon-ferried sea vessel MV Uhuru that has so far transported over 21.3 million litres of diesel to Uganda since December 2019. This graphically demonstrates marine transportation of fuel is a viable option that the region should capitalise on.

Indeed, the business potential of waterway transportation of fuel is what KPC had in mind when they invested Sh1.9 billion in putting up the Kisumu Oil Jetty in 2018. The facility is expected to deliver petroleum products to neighbouring Uganda, Rwanda, Burundi, Eastern DRC and parts of Tanzania.

This will create an efficient and commercially viable integrated marine fuel transportation system in the region that will reduce transport costs for the oil marketing companies.

It is, therefore, expected that once Uganda completes the construction of her jetties in Entebbe and Jinja to enable commencement of full commercial operations for the jetty, Kisumu will be transformed into the region’s petroleum export hub.

The emerging opportunities on the lake and on land will in turn stimulate economic activity across the Great Lakes region, with an increase in vessels inspiring other industries to take up this mode of transport.

As the East African region advocates for more intra-Africa trade with new socio-economic opportunities for the masses, a sufficient and efficient infrastructural system is vital to ensuring adequate, reliable and cost-effective supply of petroleum products across the region. This is what the Kisumu jetty is promising to deliver.

Once operational, the facility is expected to increase maritime transport activities on the lake with the shipping and docking facilities required to support the venture also enabling other industries to develop additional transport services along the lake. The jetty, which was constructed by a Kenyan engineering firm Southern Engineering Company, will boost throughput in Kisumu by one billion litres a year in phase 1 and up to 3 billion litres per year by 2028.

Fuel supply to the export markets of Uganda, Rwanda and Eastern DRC stood at 2.4 billion litres in 2015 but rose to 3.1 billion litres in June. With such volumes, the project has the potential to turn Kisumu into a focal point of oil and gas commerce in the region making it one of the busiest inland ports in Africa.

To ensure the new jetty is adequately supplied and can sustain the export market, KPC already constructed a 122km Sinendet-Kisumu pipeline which is commonly referred to as Line 6. The completion of this pipeline from Sinendet in Nakuru county to Kisumu in 2016 has boosted petroleum product availability in Western Kenya, which used to experience frequent fuel outages and the export markets of Uganda, Eastern DRC, Rwanda, Burundi and Northern Tanzania further increasing the viability of Lake Victoria as the region’s newest petroleum transport avenue.

These capital investments are geared to improve on how fuel gets to our customers and consumers in Kenya and the region. With these projects, Kenya has the opportunity to bolster regional business and strengthen her ties with the neighbouring countries as we strive to transform the lives of our people.

It is in this vein that recent media reports have been asking when Uganda will complete putting up her jetties so that Lake Victoria’s integrated transport system can be fully utilised.

In March this year, a team from KPC visited Uganda and established the complementary facilities in Entebbe and Jinja are not complete. This meant that the Kisumu Oil Jetty continues to remain unutilised. The receipt facility under construction by Mahathi Infra Ltd in Bugiri-Bukasa, Entebbe, is due for completion in March 2021, while the receipt facility in Jinja has yet to formally commence and remains in planning phase between the Joint Venture partners.

Nonetheless, Jinja Storage Terminal offers tankage that can be used for rail wagon and truck receipts. Despite these delays, commercialisation discussions are ongoing between KPC and the stakeholders in Uganda on the best ways to utilise Lake Victoria for fuel transportation.

With additional benefits of enhancing safety and environmental conservation and lowering road maintenance costs because of reduced trucks on our roads, the jetty will also contribute to reduction of cases of adulteration, which have been common in the region targeting transit product.

Kisumu Oil Jetty’s viability is not in question because soon, it will place the Western Kenya region on a path of socioeconomic transformation that will ensure the region enjoys high quality of life creating dozens of jobs for many young people.

Dr Macharia Irungu is the Kenya Pipeline Company MD. He can be reached on [email protected]