HomeNewsPlans to build a new Mombasa-Nairobi pipeline underway

Plans to build a new Mombasa-Nairobi pipeline underway

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A new Mombasa-Nairobi pipeline is set to be constructed by Kenya Pipeline Company (KPC) for the transportation of petroleum products. This comes barely four years after the commissioning of the line that currently carries fuel between Mombasa and Nairobi.

The newly constructed Line 5 Mombasa-Nairobi pipeline went into operation in 2018. Although it can pump up to 1.8 million liters per hour, it currently pumps about a million liters per hour.  After Line 5 was commissioned, KPC continued to use the old line in addition to the new one until last year.

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It is said that the pipeline is currently under strain. Additional investments, like the construction of another line as well as increasing the capacity at its inland depots, are needed.

KPC calls for an increase in tariff oil marketing companies pay to use its pipelines and depots

In order to actualize its plans to construct the new Mombasa-Nairobi pipeline, KPC has called for an increase in the tariff oil marketing companies pay to utilize its pipelines and depots to transport and store petroleum products.

The company has reportedly submitted an application to the Energy and Petroleum Regulatory Authority (Epra) for a 13% rise in its transport and storage tariff, which would bring it from the current Sh4.61 per cubic meter per kilometer to Sh5.22 over the 2022–23 financial year.

In the 2023–2024 financial year, the price will rise to Sh5.53 per cubic meter per kilometer. However, it will fall slightly to Sh5.50 in the following year. This is when the new Mombasa-Nairobi pipeline is expected to have been fully completed.

The application date of the tariff review

KPC initially applied for a tariff review in January of this year. This is according to Elizabeth Akinyi, chief planning officer at KPC. Akinyi said that the application was amended in July to cater to the anticipated investments in the new Mombasa-Nairobi pipeline. In their initial tariff application, she explained that they had not factored in the capital for improvement of the Mombasa-Nairobi line.

The additional money from the higher tariff is anticipated to allow KPC to expand its storage capacity at its depots in the Western Kenya region. Due to storage constraints, Ms. Akinyi said that KPC’s depots in Eldoret and Kisumu have been experiencing operational challenges.

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