The Ministry of Energy has brokered a deal that will see the Kenya Pipeline Company (KPC) lease the oil refinery facilities in Changamwe
The Kenyan Ministry of Energy has brokered a deal that will see the Kenya Pipeline Company (KPC) lease the oil refinery facilities in Changamwe. This is separate from the earlier plan that would have seen the pipeline manager acquired the Kenya Petroleum Refineries Limited (KPRL). This lease comes after a period of stagnation in the previous acquisition process.
According to The Citizen, the Ministry of Energy had initially wanted KPC to acquire the KPRL facilities and convert it into an oil storage facility as Kenya gears up for commercialisation of its crude oil.
But in the new lease agreement, the two companies will work in partnership with the expected development of the current and new infrastructure.
“It is not a take-over of KPRL and both shall continue to be two distinct entities. It won’t occasion loss of employment of any KPRL staff,” Energy Cabinet Secretary Charles Keter said while overseeing the signing. The lease deal will be for a period of three years.
According to Mr Keter the new deal will see Kenya Pipeline and KPRL invest in an LPG handling facility on the refinery’s grounds.
“In addition to this, the government is looking to invest in LPG facilities on KPRL’s grounds with over 309 acres of land available at its Changamwe facility,” he said.
KPRL shut down its operations in 2013 following a disagreement between the government and India’s Esser Energy.
The government bought back the controlling stake in the refinery last year for Sh500 million.