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Home >> Business
UPDATED: 08:36, May 09, 2006
Kenya's pipeline company plans regional expansion
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Kenya's main pipeline company announced Monday it plans regional expansion, targeting countries which are emerging from conflicts.

The Kenya Pipeline Company (KPC) said it will rollout oil pipeline to six countries in the Eastern Africa region to offset high demand for petroleum products in the Great Lakes region.

"We envisage that demand for petroleum products will increase further in the near future because of the increased economic activities in the neighboring countries which have an average growth of 5.8 percent," KPC Managing Director George Okungu said in Nairobi.

He said the east African nation would build a new oil extension pipeline to act as a new alternative to the Sudanese oil pipeline, while extending its current reach to Kigali in Rwanda, a separate line to the Democratic Republic of the Congo (DRC), Burundi and Uganda.

Okungu said the firm has witnessed an unprecedented growth in its commercial operations due to the skyrocketing demand for petroleum products in the region.

KPC, a state owned oil pipeline monopoly with the sole mandate to transport "white-oil products" released the company's financial results of 300 million U.S. dollars as dividends for the financial year 2003/04-2005 to the government Monday.

Kenya exports refined oil products to 11 countries in the Great Lakes region but KPC's inability to pump more fuel from Mombasa, where the country's single crude oil refinery is based from where transporters take it further inland into the region has been constrained.

KPC has recorded a 300 percent rise in its pumping capacity, rising from 880,000 cubic meters to 3.5 million cubic meters in 2005, due to the unprecedented economic growth generated from the return to peace in Burundi and the relative calm in the DRC.

Kenya plans to build a 1020 km crude oil pipeline extending from Kapoeta in Southern Sudan to its proposed inland free Port of Lamu in addition to the signing of an oil exploration data exchange pact with Sudan.

Kenya imports all oil products consumed in the country from the Middle East and efforts to import oil from Sudan in the past have been fruitless because of the East African nation's inability to refine the heavy crude oil from the Southern Sudan oil fields.

East African countries consume about 3.5 million tons of petroleum products.

The importation of these products on average cost the economies of the region huge sums of money totaling 1 billion dollars; this is a total of 25 percent of all international import.

"Petroleum products are an important input in all the sectors of the economy and therefore its cost efficiency is critical for overall economic efficiency," says Finance Minister Amos Kimunya as he received the payment of dividend to the treasury.

Source: Xinhua


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