East Africa powerhouse, Kenya is planning to construct the biggest import and storage gas facility in Mombasa and license more private companies to compete with Tanzania.
Until now, Tanzania has dominated the business for years in the region but through the planned construction seeks to dominate in the supply of liquefied petroleum gas (LPG).
In Tanzania, imports by LPG marketing companies (LMCs) grew by 12.9 percent, up from 107,083 tonnes in 2016/17 to 120,961 tonnes in the 2017/18 financial year. Imports also grew by 20 percent in the following year, reaching 145,800 tonnes, then recorded a massive 30 percent growth, reaching 190,248 tonnes in the 2019/20 financial year, data from the Energy and Water Utilities Regulatory Authority (Ewura) shows.
Kenya is hoping to give her east African neighbour a good run in the push to increase its stakes and investment in the ply of liquefied petroleum gas (LPG).
The announcement for the 25,000 tonnes storage facility was announced on Thursday by the Kenya Pipeline Company (KPC). Kenya had banned imports of gas from Tanzania through the Namanga border which it shared with Tanzania.
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.
The KPC 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.