In Summary
  • A British firm has presented two plans with a price variation of around Sh10 billion for the crude oil duct project extending from Coast to Lokichar.
  • Kenya can opt for a pipeline with onshore storage facilities that will cost Sh121.45 billion to construct or one with floating storage facilities at a cost of Sh111.33 billion.

Kenya will spend about Sh121.45 billion to build the Lokichar-Lamu pipeline, which is expected to traverse more than five counties, the Front End Engineering Designs (FEED) and Environmental Impact Assessment (ESIA) reports seen by the Nation reveal.

DECISION

British firm Wood Group Plc has presented two designs for the Lokichar-Lamu crude oil pipeline (LLCOP) project with a price variation of around 10 billion. Kenya is expected to make a decision by mid-January 2020 to pave the way for construction to start.

The project is currently at the pre-Final Investment Decision (FID) stage, with the engineering, procurement and construction (EPC) tendering process ongoing. The final investment decision is expected by June next year.

With land acquisition currently being handled by the National Land Commission (NLC), and approval of the ESIA by the National Environment Management Authority (Nema) expected by the end of March next year, the project will be ready for launch.

According to the design documents, Kenya can opt for a pipeline with onshore storage facilities that will cost Sh121.45 billion to construct or one with floating storage facilities at a cost of Sh111.33 billion.

OFFLOADING

In the two options, the designs show construction of the onshore pipeline will cost Sh57.50 billion and Sh16.64 billion for pump stations, with the variation mainly being in the marine terminal set to be built in Lamu, which will cost Sh14.77 billion for onshore and Sh4.55 billion for floating storage.

According to the designs, the onshore storage will comprise a buried, insulated, electrically trace-heated 18-inch, 824km pipeline from Lokichar to Lamu; 16 stations; Lamu marine terminal with 1. 5 million litres capacity; onshore storage tanks; and a load out to Suezmax tankers at Berth 3 in Lamu port.

“This option is for a large conventional tank farm with three 500,000 barrels floating-roof storage tanks (1.5 million barrels storage). Offloading will utilise large flow pumps to pump about one million barrels of crude oil from the storage tanks into export tankers (Suezmax) at Berth 3 within a 30-hour window,” the FEED study shows.

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