July 20, 2018 [Journal du Cameroun] - State-owned Kenya Pipeline Company (KPC) on Monday announced it has completed the construction of four storage tanks at a cost of 5.3 billion shillings ($50 million), following the recent completion of the new $476 million Mombasa-Nairobi oil pipeline.
The project involved construction of four additional tanks to provide sufficient capacity for receipt of higher volumes of diesel and super petrol products, following the recent completion of the new 450 km pipeline that will transport oil from the port city of Mombasa to Nairobi.
The additional tanks with a capacity of 133 million litres of fuel have more than doubled the storage capacity of diesel and super petrol from the current 100 million litres to 233 million litres, effectively providing sufficient capacity for receipt of higher volumes of product through the new oil pipeline.
The new 20-inch pipeline will ensure sustained, reliable and efficient transportation of petroleum products in the region over the next three decades.
KPC’s managing director Joe Sang said the new tanks will enhance operational flexibility and increase tank turnaround at KPC’s Kipevu Oil Storage Facility (KOSF) in Mombasa.
“Besides guaranteeing security of supply of petroleum products, the new tanks will also enhance operational flexibility and increase tank turnaround at Kipevu resulting in more ullage creation at KOSF and reduction of demurrage charges,” said Sang in a statement issued in Nairobi.
Cabinet Secretary for Petroleum and Mining, John Munyes, said the new tanks will increase KPC’s overall storage space by more than 20 percent from the current capacity of 612.3 million litres to 745 million litres.
“KPC has in essence addressed the problem of insufficient ullage, which limited economies of scale as far as petroleum supply logistics is concerned. We are talking of a bright future in national and regional petroleum trade,” Munyes added.
At the moment, ocean tanker owners charge marketers demurrage penalty which adds to about one Kenya shillings per litre due to insufficient ullage.
Demurrage charges are incurred as vessels are forced to wait at the Mombasa port to discharge fuel into KPC’s system because of insufficient capacity.
The new tanks and new oil pipeline will adequately serve Kenya and the region’s petroleum demand, which is projected to be 11.4 billion litres in 2020 and 24.5 billion litres in 2044.
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