Kenya to complete construction of major oil terminal in April

Kenya’s leaders say construction on the Kipevu Oil Terminal in Mombasa, the largest of its kind, will be completed in April.

The terminal, a 770-metre long jetty, is fully funded by the Kenya Ports Authority (KPA) and is being built by China Communications Construction Company.

President Uhuru Kenyatta inspected the facility alongside Chinese Foreign Minister Wang Yi who was in the country for a 2-day official visit.

A photo of the Kipevu Oil Terminal at the Kenyan port city of Mombasa. COURTESY/PSCU

Once complete, the terminal, which is 96 percent done, will be able to load and offload very large sea tankers of up to 200,000 deadweight tonnage (DWT).

It will also enable the government to save more than Sh2 billion (more than 1.7 million U.S. dollars) every year in demurrage costs incurred by oil shippers. This in turn, the government added, will contribute to a “significant reduction” in fuel pump prices.

The demurrage is caused by long queues of vessels parked outside Kenya’s harbour waiting to discharge their product.

“Once complete the new facility will be able to reduce not only the cost of fuel but also to ensure that Kenya is able to consistently have an adequate supply of fuel for our needs and development needs that of our people,” the government said in a statement.

The government says the new terminal will be able to address the increasing demand for oil products while improving Kenya’s economy.

Last year saw Kenyans express fury over rising fuel prices adding pressure on a population already reeling from the effects of the COVID-19 pandemic.

In September, fuel prices hit record levels after the country’s energy regulator, the Energy and Petroleum Regulatory Authority (EPRA), halted subsidies on petrol, diesel and kerosene used to keep prices low since March.

In October, the regulator reduced prices in its monthly review in the wake of an intervention by the government which saw the EPRA directed to reduce fuel prices despite a shortage of funds.