Oil Firm to Set up Sh1bn LPG Terminal in Kwale County

Ken Petrogas Limited intends to diversify its revenue streams by constructing a Sh1 billion Liquefied Petroleum Gas (LPG) and natural gas terminal as well as a jetty in Shimoni, Kwale County.

According to the firm’s environmental and social impact assessment study report, the facility will be able to handle 10,000 tonnes of LPG and 140,000 cubic meters of Liquid Natural Gas (LNG).

The facility, which will be built on 6.52 acres of land, will also include a floating jetty and a marshalling yard with space for up to 65 trucks.

“The total estimated cost for the project is approximately Sh1.13 billion,” said Ken Petrogas in the report submitted to the National Environment Management Authority (Nema) in March for approval.

The company’s entry into the gas handling business is expected to reduce the cost of gas in the country even further by taking advantage of bulk purchases.

Due to insufficient gas discharge facilities, oil marketers previously imported cooking gas in relatively small quantities.

Due to high import premiums and demurrage, which are penalties marketers pay shipping companies when tankers fail to offload within the specified period, this resulted in cooking gas shortages and expensive LPG.

Kenya last month granted a license to Tanzanian billionaire Rostam Aziz to establish a cooking gas plant and storage facilities in Mombasa under his Taifa Gas brand.

Taifa Gas will construct the 30,000-tonne facility at the Special Economic Zone in Dongo Kundu, near Mombasa’s port. It was previously estimated to cost $130 million (Sh16.25 billion).

The company is Tanzania’s largest LPG supplier and has been supplying the Kenyan retail market by road.