Kenya’s early oil production awaits road upgrade

KENYA – The upgrade of the 213 kilometres road from Lokichar to Kitale in northwestern Kenya is crucial to early crude oil production to start in mid 2017.

A confidential document seen by The EastAfrican puts estimated cost of rehabilitation of the road at between $40 million and $50 million.

Tullow Oil Plc jointly with Africa Oil Corporation have from 2012 discovered 600 million barrels of crude oil in the South Lokichar basin, which straddles exploration blocks 10 BB and 13T in northwestern Kenya.

The report says that the rehabilitation of the road will allow trucks to transport oil in the early production phase from Lokichar to Eldoret and could be completed within 12 to 18 months.

“Studies estimate minimal rehabilitation between Kitale and Lokichar will allow the road to support the transportation of early oil up to 20,000 barrels per day for a period of three to five years,’’ reads the confidential document.

The oil will be transported in special tanks from South Lokichar to be loaded on rail wagons for an 826km journey to the Mombasa seaport.

Storage tanks

Projections show 20,000 barrels per day (bbl/d) will require 175 tanktainers (approximately 12,000 barrels in transit and storage) and 40,000 bbl/d will need 350 tanktainers (about 24,000 barrels in transit and storage).

Crude will be stored at Kenya Petroleum Refineries Ltd in Mombasa; when stock reach 80,000 tonnes, it will be pumped to Kipevu Oil Terminal and loaded in sea tanks for export. Global acceptable crude oil loss is 0.03 per cent of volume fully loaded.

The Kenya Early Oil Production Report presented to President Uhuru Kenya last month by Ministry of Energy and stakeholders shifts crude output to mid 2017 from the initial target of September this year.

The changes factor in enabling infrastructure like the A1 road from Kitale through Lokichar to South Sudan, environmental approvals, commercial framework, crucial community and Turkana County government consent.

An environmental social impact assessment on oil production will be undertaken for approval by the National Environmental Management Authority parallel to land acquisition.

The process of obtaining initial rental of land from Turkana County could take six months and the duration of compulsory acquisition of land through National Lands Commission is 12 to 18 months.

Others factors are land use change at RVR Eldoret yard — now used as sports field by Moi University students — and clearance of the Mombasa loading pipeline right of way, which has already been encroached on, leading KPRL to obtain court order.

Issues to be addressed prior to oil production are disposal of waste sludge generated during steam cleaning of tankers in Mombasa and workforce accommodation with welfare facilities at Lokichar and Eldoret.

Two wells in Amosing field and three wells in Ngamia field are set to be used initially.

February 13, 2016; http://www.theeastafrican.co.ke/business/Kenya-early-oil-production-awaits-road-upgrade/-/2560/3074854/-/jauxjg/-/index.html

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