Kenya looking for $500m to construct new Pipeline

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Kenya is looking for  a financier of a $500 million loan to put up a new fuel pipeline from Mombasa to Nairobi to replace the current 14 inch pipeline.

The project that is being put together by East African countries in the northern corridor namely Kenya, Uganda and Rwanda will run concurrently with the $22 billion LAPSSET project connecting Lamu – Juba and Ethiopia that also aims at constructing a pipeline to South Sudan.

The funds are being sought by the Northern corridor Integration projects summit of heads of state even as the feasibility study being funded by the member states continues.

KenyalondonNews reports that during a meeting by the corridor Integration projects summit of heads of state meeting held in Kampala last week directed that line ministers from Kenya and South Sudan meet in a month to consult on building the Lokichar-Lamu crude oil pipeline.

The ministers have also been allowed to proceed and call for expression of interest for the construction of the crude oil pipeline starting next month with the Kenya pipeline company having called for such expressions by March 11th.

The decision to build a new pipeline is said to have been reached after a consultancy firm Pipeline Focus submitted a report thatsaid it did not make economic sense to repair the old pipeline that is corroded and risks throwing the countries into outages as a result of supply disruptions.

“The new line is a strategic national project that will enhance security of supply to the region, while transporting increased volumes,” said George Wachira, the director of Nairobi-based Petroleum Focus.

Currently most of supplies to Uganda and Rwanda use the road network.

The pipeline is also to be financed from internally generated funds with the pipeline set to be able to cater for the regions demands in the next 30 years.

The pipeline is said to take two years to be constructed with works set to start in 2015.

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Author: Samuel Kamau Mbote

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