The new Sh40 billion offshore Kipevu Oil Terminal (KOT), located at the Port of Mombasa, is expected to be operationalized by April 2022.
The project which commenced in February 2019 is currently 96 per cent complete.
Inspecting the construction of the terminal, President Uhuru Kenyatta said the new jetty will enhance supply and ensure price stability of petroleum products in Kenya and the region by replacing the 50-year old onshore Kipevu Oil Terminal (KOT).
When operational, Kenyatta noted that the new offshore jetty will save the country in excess of Shs 2 billion annually in demurrage costs incurred by oil shippers thereby contributing to a significant reduction in fuel pump prices.
“Once complete the new facility will be able to reduce not only the cost of fuel but also to ensure that Kenya is able to consistently have an adequate supply of fuel for our needs and development needs that of our people.
“This terminal once commissioned in a few weeks time will result in the saving of almost Shs 2 billion that we are currently paying every year because of demurrage occasioned by the long queues of vessels parked outside our harbour waiting to discharge their product,” he said.
The President hailed Kenya’s development partnership with China saying the arrangement had helped deliver key infrastructure projects, adding that the populous Asian nation was progressively opening up its expansive domestic market to Kenyan exports.
“Our partnership with China is not a partnership based on China telling us what to do. It is a partnership of friends, working together to meet Kenya’s socio-economic agenda.
“The old Kipevu Oil Terminal which for many years we have struggled with, was not able to meet the demands of increasing population, to meet the demands of the growing economy.
“We needed this facility to be able to cater for those demands and China was there when we asked for partnership in developing it,” the President said.
He added: “They were there ready to work and walk with us hand-in-hand and that indeed is what we call a friend. We do not need lectures about what we need, we need partners to help us achieve what we require”.
The facility has four berths and will for starters be able to accommodate three ships concurrently with a capacity of 200,000 tonnes each.
This compared to the current KOT, a single jetty with a capacity to accommodate only one vessel at any given time.
The new Kipevu Oil Terminal will have numerous benefits to the economies of the region including a reduced vessel turn-around time from 4 to 2 days, guaranteed security of supply and significant reduction in demurrage costs among others.
The terminal will effectively replace the old Kipevu Oil Terminal situated on the mainland Port Reitz, which was built in 1963 to serve the then East Africa Oil Refinery (EAOR) which later became the Kenya Petroleum Refineries Limited (KPRL).
