Oil firm to set up Sh1bn LPG terminal in Kwale county
Friday March 17 2023
Petroleum products firm Ken Petrogas Limited plans to build a Sh1 billion Liquefied Petroleum Gas (LPG) and natural gas terminal and a jetty in Shimoni in Kwale County as it moves to diversify its revenue streams.
The firm has revealed in an environmental and social impact assessment study report that the facility will have a capacity to handle 10,000 tonnes of LPG and 140,000 cubic metres of Liquid Natural Gas (LNG).
The facility, which will be built on land measuring 6.52 acres will also have a floating jetty and a marshalling yard that can accommodate up to 65 trucks.
Read: Treasury revives LPG subsidy scheme as prices rise
“The total estimated cost for the project is approximately Sh1.13 billion,” said Ken Petrogas in the report submitted to the National Environment Management Authority (Nema) in March for approval.
The firm’s entry into the gas handling business is expected to further lower the cost of gas in the country through the advantage of bulk purchases.
Previously, oil marketers imported cooking gas individually in relatively small quantities due to inadequate gas discharge facilities.
This led to cooking gas shortages and expensive LPG due to high import premiums and demurrage, which are penalties marketers pay shipping companies when tankers fail to offload in the stipulated period.
Kenya last month offered a Tanzanian billionaire Rostam Aziz a licence to set up a cooking gas plant and storage facilities in Mombasa, under his Taifa Gas brand.
Read: Kenya’s plan to call the shots in LPG logistics
Taifa Gas will build the 30,000-tonne facility at the Special Economic Zone in Dongo Kundu, near the port of Mombasa. It was earlier estimated to cost $130 million (Sh16.25 billion).
The firm is Tanzania’s largest LPG supply company and has been feeding the Kenyan retail market via road.