Kenya’s plan to seize LPG logistics business from Tanzania

Kenya seeks to dominate in the supply of liquefied petroleum gas (LPG) by constructing the biggest import and storage gas facility in Mombasa and licensing more private companies to compete with Tanzania which has dominated the business for years in the region.

The announcement to construct a 25,000 tonnes storage facility by the Kenya Pipeline Company (KPC) which will connect to the Ksh42 billion new Kipevu Oil Terminal 2 (KOT) at the port of Mombasa comes few days after Kenya banned imports of gas from Tanzania through the Namanga border.

KPC has contracted a giant Pakistani firm; Petrochem Engineering Services to design LPG import and storage facility in Changamwe, Mombasa as five private companies apply to tap into the new Kipevu Oil Terminal 2.

The facility in Mombasa once completed will quicken the loading of cooking gas for distribution by trucks which will help to cut demurrage costs.

KPC says faster loading is expected to translate to lower prices for LPG by 30 percent once operational as oil marketing companies pass the benefits of reduced demurrage costs to consumers.

“LPG storage capacity in Mombasa is limited and huge demurrage is incurred by LPG ships thus affecting the final consumer price of bottled gas,” read part of KPC in tender documents.

Source: The Citizen Tanzania NewsPaper

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