Four months after announcing the decision to privatise Kenya Pipeline Corporation (KPC), the national government is now planning to construct a new pipeline from Mombasa to Nairobi.
This was revealed by the National Treasury through the Fourth Medium Term Plan 2023-2027.
Titled “Bottom-Up Economic Transformation Agenda for Inclusive Growth”, the report aims at strengthening Kenya’s prospects towards transitioning to an upper middle-income country.
Building the new pipeline is also being seen as one of the ways President William Ruto’s administration can enhance the country’s competitiveness.
According to the National Treasury, the new pipeline is also geared towards expanding the country’s revenue base.
“The programme focuses on public infrastructure that have a huge potential for generating revenue for the country by charging user fees and thereby expanding the country revenue base,” the Medium Term Plan denotes.
In the new plan, the government will invest in a new 2-inch 450-kilometre pipeline that will transverse from Mombasa to Nairobi.
“This will increase the flow rate from 1,000m3 /hr to 2,000m3 /hr and conversion of KPRL crude oil storage tanks in Mombasa to refined products storage to increase the capacity by 200,000m₃,” the government explains the need for the new pipeline.
Additionally, the government will invest in the Lokichar-Lamu crude oil pipeline as another measure to expand the tax revenue base.
“The project aims to construct 824km 20-inch pipeline with a marine terminal and load-out facility to transport crude oil from South Lokichar oil fields to Lamu Port for export,” the Medium Term plan reveals.
National Treasury announced the privatisation of KPC in November 2023 despite the parastatal being one of the few government entities turning in profits.
The justification for privatising the parastatal was that its profitability would encourage more private sector participation improving efficiency and competition.
This will subsequently attract private sector capital, investments and expertise, and offer an opportunity for expansion of the oil and gas pipeline infrastructure to unserved regions.
