Sh40bn Terminal Shapes Mombasa Port Battle
08.18.2022 By Ella Keskin - NEWS

August 18, 2022 [ Financetin ] – The Kipevu Oil Terminal in Mombasa.

 

Before the launch of the new Sh40 billion Kipevu Oil Terminal in Mombasa, the old facility that had been in existence for six decades could only handle 35,000 tones of cargo at a time. It could also accommodate one vessel at a time of upto 120,000 dead weight tonnage.

But the new offshore terminal has changed the fortunes of the Mombasa port, which is facing increased threat from neighboring ports in Tanzania and Djibouti, given that it will handle four vessels of up to 200,000 dead weight tonnage at a time. This means that at optimum, in seven days, it would handle what the old port would do in a month.

The new facility promises to ease pressure on the Mombasa port that had been aggravated by increased demand in Kenya and the region.

When he commissioned the new terminal, President Uhuru Kenyatta said the petroleum sector is the cog of economic development as it contributes immensely to the cost of doing business, which translates to the standards of living.

The terminal consists of four berths with a total length of 770 metres and one work boat wharf at the Westmont area for landing facilities.

The four berths can also handle six different hydrocarbon products, a Liquefied Petroleum Gas (LPG) as well as crude and heavy fuel oil. It also has provision for handling three white oil products (DPK – aviation fuel, AGO – diesel and PMS – petrol).

Kenya says it will invest in the energy and petroleum sector, to create a reliable and efficient energy supply through oil exploration and oil handling facilities.

“Over the last few years, the region has been making a significant effort towards the exploration and mining of oil. Soon the region will join the oil-producing and exporting countries of the world,” President Kenyatta said.

He said the need for petroleum products has continued to increase in the region due to economic growth and development through rapid industrialization.

Testing of the facility was successfully conducted on July 9 and since then it has handled more than seven vessels including the new MV Proteus which was on her maiden voyage from the Port of Tanjung Langsat in Malaysia. She was sailing on clean energy, the first ever of its kind to call in the port.

There are risers each dedicated to a separate oil product and six onshore pipelines each dedicated to a separate oil product connecting the terminal to the Kenya Petroleum Refineries Limited (KPRL) and Kenya Pipeline Company (KPC) storage tanks.

“The modern terminal is faster and will have various benefits to the economies of the region. Key among them include reduced vessel turn-around time from four to two days, with a significant reduction in demurrage costs. On the other hand, it is expected to reduce freight costs owing to improved cargo handling capacities and leverages associated with larger economies of scale,” said Mr Kenyatta.

Moreover, with enhanced LPG handling facilities it will result in reduced LPG costs in the region as well as increased accessibility for LPG.

President Kenyatta said the Port of Lamu has been designed to include a petroleum handling facility and a refinery that will be linked by a pipeline to oil-producing areas of Kenya, South Sudan and Uganda.

President Kenyatta lauded development partners, especially the government of China and China Communication Construction Company for their continued support of Kenya’s development agenda.

Kenya Ports Authority (KPA) acting managing director John Mwangemi said the facility has enhanced the port’s capacity to discharge oil products in a timely and efficient manner significantly easing the pressure aggravated by increased demand in the region.

“Global trade relies on an adequate supply of oils and other sources of energy to prosper, and our region is no exception. KOT is the most technologically advanced oil handling facility and stands out as one of its kind in Sub-Saharan Africa. With its capacity to berth four vessels of up to 170,000 DWTs at a go, the new KOT will significantly complement oil supply and availability in East and Central Africa,” said Mr Mwangemi.

“There are risers and six onshore pipelines each dedicated to a separate oil product connecting the terminal to the Kenya Petroleum Refineries Limited and Kenya Pipeline Company storage tanks. The facility is fully automated and can be operated from the control room remotely,” he added.

The KPA boss said due to its high level of efficiency and huge capacity, the terminal has already started attracting large vessels to the port as it reduces ship waiting time and cost to the importers. The effect is expected to trickle down to the end users.

“As KPA we have started to see an elevated trend in oil volumes and sizes of ships calling. In the last week, we have handled Seven vessels, which would otherwise be handled for over one month. The vessel you have just flagged off for discharge is carrying about One Hundred Million litres,” he said a week after its commissioning.

He assured the oil importers that Kenya now has the best facility which should be put to maximum use.

“With an elaborate ICT strategy in place, we have attained the E-Port status and streamlined our internal managerial, operational, cargo handling and billing functions. Our customers can transact business electronically wherever they are,” he said.

 


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