The project slated to start this year will involve decommissioning of the existing Kipevu oil terminal and construction of a new jetty near Dongo Kundu.

Construction of the new jetty is expected to take 30 months and is part of the ongoing expansion of Mombasa port’s second container terminal to handle larger ships.

Once the project is completed, Kenya will also have improved its oil storage facilities which may stabilise oil prices. Currently Kenya has no strategic oil reserves and relies on the oil marketers’ 21-day oil reserves.

Kenya has two oil terminals — Kipevu situated on the mainland Port Reitz, which can accommodate a single vessel of up to 100,000 tonnes at a time and the Shimanzi one that can take in a 30,000-tonne ship.

Kipevu handles 90 per cent of oil imports, some of which head to landlocked countries in the region such as Uganda, South Sudan and Burundi.

Oil products

The smaller Shimanzi oil terminal handles the rest of the imports with the oil products evacuated vial road and rail. The long-term plan is for Kenya to cease reliance on Shimanzi.

Mr Wahungu said Nema had already received an Environmental Impact Assessment Study report on the relocation of the Kipevu oil terminal.

The proposed offloading facility will have both subsea and land-based pipelines connecting it to the storage facilities in Kipevu. The subsea pipeline is 1.15 kilometres long while the on-shore pipeline is 1.05 kilometres long.

The project will comprise the inland terminal with four berths located slightly inland, capable of importation and exportation of five different hydrocarbon products, including crude oil, heavy fuel and three types of white oil products

Last year, the Kenya Ports Authority shortlisted 12 international firms for the Sh12.1 billion project out of the 31 firms from more than 15 countries that submitted the initial bids.