More trucks for crude to Coast as export plan remains cloudy

Tullow Oil will from next month increase the number of trucks ferrying oil from Turkana to Mombasa from the current 30 to 100 after the firm went into mini crude production.

The British oil explorer said the start of its Early Oil Pilot Scheme crude production on May 6th is expected to hit the 2,000 barrels per day target in June, tripling its trucking needs.

Tullow Kenya Managing Director Martin Mbogo told the Nation that although trucking of crude, which started in June 2018 was envisioned to go on for about two years, it may be extended depending on project needs.’

“The current plan is to conduct EOPS trucking for approximately 18-24 months. The schedule could, however, change in the future in line with the project needs. During EOPS phase one, about 30 trucks were in use. This figure is expected to gradually rise to a maximum of 100 trucks at the peak production of 2000 barrels per day,” Mr Mbogo said.

The involvement of more trucks will mean more expenditures in the multi-billion shilling experiment meant to try Kenya’s crude in refineries overseas.

It will, however, be good news to the suppliers of trucks and the special tank-tainers used to ferry the waxy crude which needs to remain in heated form all through the more than 800 kilometres journey.

Kenya hopes to fill the first shipment of its crude to be tested in the international market in the third quarter of 2019 but details of who is expected to buy the crude remain hazy.

Experiment

The Kenya Civil Society Platform on Oil and Gas, which described the scheme to truck crude oil to Mombasa to test the country's crude as a ‘Sh4 billion loss experiment’ in 2016 said the plan to export crude oil may still meet various hurdles.

KCSPOG Coordinator Charles Wanguhu said construction of the 821-kilometre crude oil pipeline may take longer given the outstanding issues in the ongoing negotiations between the parties Involved, which may delay the crucial Final Investment Decision.

"Tullow has put the target for the final investment decision later this year while the Front End Engineering Design (FEED) for the pipeline took quite some time. It means things will only start unfolding faster after the first shipment followed by the FID and then the financing of the crude pipeline," Mr Wanguhu said.

The Tullow manager, however, said the pipeline FEED was on target after it completed in February 2019.

“Currently, we are carrying out extra work post FEED to give a higher confidence factor on cost and schedule,” Mr Mbogo said.