Lamu refinery power plant plans are expanding as Kenya negotiates with Dangote Industries over a 1,000MW LNG facility. The proposed project would integrate power generation into the planned $16 billion Lamu refinery development.
It would also create an energy hub serving refinery operations, the surrounding industrial zone and potentially Kenya’s national grid. The government wants the larger facility to address electricity shortages and strengthen baseload generation. Meanwhile, Dangote has scheduled the refinery groundbreaking for September 30, 2026.
Lamu Refinery Power Plant expands planned generation capacity
The plant initially targeted about 500MW of captive generation for refinery operations. However, Kenya now wants Dangote to double that capacity to 1,000MW.
The proposed facility would use liquefied natural gas supplied from Tanzania. Consequently, the development could create a new cross-border market for Tanzanian natural gas.
Kenya and Dangote must still determine how the LNG would reach the Lamu site. One option involves constructing a pipeline linking Tanzania with Kenya.
Another option involves transporting LNG by tanker to a receiving terminal at Lamu. The final choice will shape the project’s supporting infrastructure and logistics requirements.
The larger plant would provide electricity for the refinery and potentially the surrounding Lamu Special Economic Zone. It could also supply surplus electricity to Kenya Power under an agreed power purchase arrangement.
David Ndii, President William Ruto’s economic adviser, said the government wants the additional capacity for the Special Economic Zone. The proposed petrochemical complex would also require substantial electricity.
Lamu Refinery Power Plant strengthens coastal energy infrastructure
The 1,000MW target would make the facility one of East Africa’s largest proposed gas-to-power projects. It would also give Kenya another source of dispatchable electricity alongside renewable generation.
Kenya relies heavily on geothermal, hydro, wind and solar generation. However, drought can reduce hydropower output, while wind and solar production varies with weather conditions.
Therefore, LNG-fired generation could provide additional baseload capacity for industrial consumers. The project could also support Kenya’s broader effort to diversify its electricity supply.
The proposed power plant sits within a much larger refinery construction program. Dangote plans a 700,000-barrel-per-day refinery at Lamu, with construction scheduled to begin this month.
The refinery’s estimated cost has fallen from about $17 billion to approximately $16 billion. Dangote attributed the reduction partly to lessons from constructing his Nigerian refinery.
However, the power project remains subject to further negotiations. Kenya and Dangote still need agreements covering gas supply, financing, electricity purchases and environmental requirements.
The refinery itself also faces a separate crude supply challenge. Kenya has no commercial crude production capable of supporting the planned facility.
David Ndii estimates that regional sources could potentially provide more than 600,000 barrels daily. His estimate includes supplies from South Sudan, Uganda and Kenya.
Therefore, both projects will require extensive regional infrastructure and long-term supply agreements. If implemented, the power plant could become a major component of Lamu’s emerging industrial infrastructure.
Kenya’s broader gas infrastructure plans also include a proposed 30,000-ton LPG storage and bottling facility in Mombasa. The facility would support stronger LPG storage capacity and improve regional fuel supply resilience.
Kenya has held talks with Nigeria’s Asharami Synergy over the proposed development. The project would complement wider investments in coastal energy infrastructure and strengthen Kenya’s position as a regional petroleum hub.
Project Fact Sheet
Project: Lamu Refinery Power Plant
Integrated development: Proposed Lamu oil refinery and petrochemical complex
Location: Lamu, coastal Kenya
Proposed power capacity: 1,000MW
Initial power capacity: Approximately 500MW
Generation technology: LNG-fired power generation
Proposed gas source: Tanzania
LNG delivery options: Cross-border pipeline or tanker shipments
Refinery capacity: 700,000 barrels of crude oil per day
Refinery investment: Approximately $16 billion
Earlier refinery estimate: Approximately $17 billion
Refinery groundbreaking: September 30, 2026
Power project status: Negotiation and planning stage
Proposed electricity use: Refinery, petrochemical complex and Lamu Special Economic Zone
Potential grid role: Surplus electricity supply to Kenya Power
Strategic objective: Provide reliable industrial electricity and support Kenya’s energy diversification
Regional significance: Potentially one of East Africa’s largest gas-to-power developments
Supporting infrastructure: LNG receiving facilities, gas supply infrastructure and electricity transmission
Key outstanding requirements: Gas supply agreement, financing, PPA, environmental approvals and technical negotiations
Project Team
Developer: Dangote Industries Limited
Refinery developer: Dangote Industries Limited
Group President: Aliko Dangote
Oil and Gas Executive: Devakumar Edwin, Dangote Industries
Government partner: Government of Kenya
Economic policy coordination: David Ndii, Economic Adviser to President William Ruto
Energy policy authority: Kenya Ministry of Energy and Petroleum
Power offtake stakeholder: Kenya Power
Proposed gas supplier: Tanzania
Proposed fuel source: Tanzanian natural gas resources
Environmental oversight: Relevant Kenyan environmental authorities
Regional crude stakeholders: Kenya, Uganda and South Sudan
Industrial development area: Lamu Special Economic Zone
Project status: Kenya-Dangote negotiations and technical planning
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