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Kenya’s pipeline company plans regional expansion

KENYA’S MAIN PIPLLINE COMPANY plans regional expansion, targeting countries which are emerging from conflicts. The Kenya Pipeline Company (KPC) has recorded a 300 percent rise in its pumping capacity, rising from 880,000 cubic meters to 3.5 million cubic meters in 2005, due to the unprecedented economic growth generated from the return to peace in Burundi and the relative calm in the Democratic Republic of Congo (DRC). Kenya exports refined oil products to 11 countries in the Great Lakes region but KPC’s inability to pump more fuel from Mombasa, where the country’s single crude oil refinery is based -from where transporters take it further inland into the region- has been constrained. KPC plans to rollout oil pipeline to six countries in the Eastern Africa region to offset high demand for petroleum products in the Great Lakes region. “We envisage that demand for petroleum products will increase further in the near future because of the increased economic activities in the neighboring countries which have an average growth of 5.8 percent,” KPC Managing Director George Okungu said in Nairobi.

Okungu said the east African nation would build new oil extension pipeline to act as a new alternative to the Sudanese oil pipeline, while extending its current reach to Kigali in Rwanda, a separate line to the Democratic Republic of the Congo (DRC), Burundi and Uganda. KPC has witnessed an unprecedented growth in its commercial operations due to the skyrocketing demand for petroleum products in the region. KPC, a state owned oil pipeline monopoly with the sole mandate to transport “white-oil products” released the company’s financial results of $300 million as dividends for the financial year 2003/04-2005 to the government in November 2006. Kenya plans to build a 1020 km crude oil pipeline extending from Kapoeta in Southern Sudan to its proposed inland free Port of Lamu, in addition to the signing of an oil exploration data exchange pact with Sudan. Kenya imports all oil products consumed in the country from the Middle East and efforts to import oil from Sudan in the past have been fruitless because of the East African nation’s inability to refine the heavy crude oil from the Southern Sudan oil fields. East African countries consume about 3.5 million tons of petroleum products. The importation of these products on average cost the economies of the region huge sums of money totaling 1 billion dollars; this is a total of 25 percent of all international import.

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