Oritsegbubemi Omatseyin
Lagos — The Government of Kenya has opened discussions with Sahara Group, an indigenous Nigerian energy firm to co-build a 30,000-ton facility to handle and store liquefied petroleum gas.
According to sources familiar with the plans, the deal will see state-owned Kenya Pipeline Co. forming a joint venture with Asharami Synergy Plc, an arm of Sahara Group, to build the common user terminal set to be East Africa’s biggest LPG storage and bottling facility in the port city of Mombasa.
The facility estimated to take 24-months to build will be financed by Asharami while Kenya Pipeline Co. will provide land for the project located on the port-side.
Joe Sang, the managing director of Kenya Pipeline company told Bloomberg the process of on-boarding a private sector company for the cooking-gas facility is ongoing while a spokesperson for Lagos-based Asharami, which provides warehousing and logistics terminals in the downstream oil and gas sector across Nigeria and other regions in Africa, declined to comment.
The project is expected to help the East African nation achieve universal access to clean cooking energy by 2030.
More than 90 per cent of rural households in Kenya use biomass such as wood fuel and charcoal, according to the nation’s Energy Ministry. The fuels produce noxious gases like carbon monoxide, which are blamed for shortening the lives of more than 600,000 people annually on the continent, according to the World Bank.
President William Ruto, who is promoting Kenya as a green energy champion, wants to double the usage of LPG currently at 7 kilograms (15 pounds) per capita. Kenya is also in talks with Saudi Aramco to obtain a floating LPG barge to bolster supply and reduce fuel prices.
According to Davis Chirchir, Energy Secretary, additional storage capacity will enable Kenya to consolidate LPG imports under an open tender system that awards orders to marketers with the most-favourable pricing. Currently, African Gas & Oil Co. Ltd., backed by AP Moller Capital, operates Kenya’s biggest LPG terminal of 14,000 tons in Mombasa.
The talks between Kenya and Sahara Group are still ongoing, and details regarding the project’s timeline and investment are yet to be finalised. However, this potential collaboration signifies Kenya’s commitment to improving its LPG infrastructure and promoting cleaner cooking solutions for its citizens.