The 852km Lokichar-Lamu pipeline project has reached its next stages of development. The Environmental and Social Impact Assessment (ESIA) report has reportedly been submitted to the National Environment Management Authority (NEMA) and it is currently waiting for approval.
This was revealed by the Energy and Petroleum Regulatory Authority (EPRA) of Kenya in an Energy and Petroleum Statistic Report in which it stated that the Front Energy Engineering Design for the project is already complete. The ESIA report marks a critical step towards the East African country’s ambitions of becoming a net exporter of crude oil.
Reportedly, the government is also determined to go forward with the investment that the leading party, Tullow Oil, and its partners want to make. These parties have been looking for a strategic partner to finance the next stage of development.
About the Lokichar-Lamu Crude Oil Pipeline
The Lokichar-Lamu Crude Oil Pipeline (LLCOP), also known as the Kenya Crude Oil Pipeline, is a proposed oil pipeline in Kenya. The facility will originate in the South Lokichar Basin, near the town of Lokichar, Turkana County, and end at the new Lamu Port in Lamu County. It will thus be 821 km long.
The pipeline is a sub-component of the broader LAPSSET Corridor Project. It will therefore be overseen by the Pipeline Project Management Team (PPMT) in conjunction with the LAPSSET Corridor Development Authority (LCDA). The pipeline will be a joint venture between the government and the Kenya Joint Venture (KJV)- whose shareholders are Tullow, Africa Oil, and Total. The development is estimated to cost US $1bn.
Upon completion, LLCOP the construction of which will be financed by 70% debt and 30% equity, will transport around 80,000 barrels of oil per day. Stakeholders expressed optimism that the project would be an economic game changer, particularly for the six counties that the pipeline is expected to cut across. These counties are Turkana, Samburu, Isiolo, Meru, Garissa, and Lamu.
Kenyan oil pipeline to be extended to South Sudan and Uganda
Kenya’s Energy and Petroleum Cabinet Secretary, Davis Chirchir, has said that the government has slowed down the construction of a pipeline from Lamu to Lokichar to incorporate an extension to Uganda and South Sudan.
As a result, the tender connecting the construction of a pipeline from Turkana to Lamu will be delayed to include the neighboring countries. The initial design was for Kenya alone. Now it is expected that once completed the pipeline will cover an estimated 1,500km more to Hoima, near Lake Albert in western Uganda.
Kenya’s Ministry of Energy and Petroleum had predicted that the Lamu-Turkana oil pipeline will be completed by November 2016 but now the new plans will see the completion date of the project pushed forward.
The cabinet secretary also added that they are looking for a common transaction adviser to harmonize the new designs with the feasibility designs already done for the Ugandan section. The initial cost of the pipeline is estimated to be Ksh255bn (US$2.9bn). The export capacity of the pipeline and its length will be determined by the design proposals to be forwarded by the pipeline engineering construction firms.
The construction of the pipeline was initiated after investors determined that the country’s crude oil resources had attained commercial thresholds. Kenya has a huge mineral potential but its exploration efforts have only picked up in the last 5 years with the awarding of commercial licenses in prospecting for oil, gold, coal, geothermal and rare earth.
Plans to construct a major crude oil export pipeline in Kenya underway
Plans to construct an 891km crude oil export pipeline in Kenya between Lokichar and Lamu on the Kenyan coast are underway. The pipeline construction project will cost a whopping US$ 2bn.
Energy and Petroleum minister, Mr. Charles Keter confirmed the reports and said that they will begin a search for companies to design the crude oil pipeline which is anticipated to be complete by 2021.
“In our estimation, if all goes well, the pipeline should be ready in the second quarter of 2021 and it will approximately cost US$ 2bn,” said Mr. Keter.
US $1bn oil pipeline to be constructed in Kenya
The government of Kenya through Tullow Oil, a leading independent oil exploration and production company is set to construct an oil pipeline worth US $1bn by 2022.
Tullow Oil Kenya Managing Director Martin Mbogo confirmed the reports and said the pipeline will be a joint venture between the government and the Kenya Joint Venture (KJV)- whose shareholders are Tullow, Africa Oil, and Total.
Construction of Kenya’s Turkana-Lamu crude pipeline to begin next year
Construction of the crude oil pipeline between Lokichar and Lamu Kenya is set to begin in 2020 instead of 2022 as earlier scheduled.
Mr. Bunu. Lamu East Member of Parliament announced the reports and said the early start is because the environmental assessment by ESF Consultants Golder Associates (UK) Limited is nearing completion.
Reported November 2019
Kenya receives construction designs for Lokichar-Lamu crude oil pipeline
The government of Kenya has been presented with two designs for the construction of the Lokichar-Lamu crude oil pipeline (LLCOP).
The two designs, by British firm Wood Group Plc., have a price variation of US $122.2m. The East African country can opt for a pipeline with onshore storage facilities that would cost US $1.2bn to build or one with floating storage facilities at a cost of US $1.1bn.
A breakdown of the cost
In both cases, the proposals indicate that the construction of the onshore pipeline will cost US $568.2m, pump stations US $164.4m with the difference mainly being in the marine terminal that will cost US $145.9m for onshore and US $45m for floating storage.
About US $113.6m is set aside for the company that will be contracted to execute the project under an engineering, procurement, and construction (EPC) basis, and approximately US $13.1m for the supervising firm.
The EPC tendering process is on the go with the final investment decision expected to be reached in the second half of next year.
Avoiding environmental-related obstacles
Partners in this project have been keen to ensure the project does not encounter environmental-related obstacles from conservationists and environmentalists, as manifested in the front-end engineering design (FEED) and the environmental and social impact assessment (ESIA) studies.
The ESIA, undertaken by Golder, a British consultancy firm in partnership with the Kenyan-based ESF Consultants, has been submitted to the National Environment Management Authority and it is expected to be approved by May 2020.
The FEED report indicates that the pipeline will divert in areas where it could have adverse environmental implications on wildlife. In particular, a 3km diversion has been created along its path in Samburu County to protect the habitat of the Grevy’s Zebra.
This has resulted in a 9% increase in the length of the pipeline to 824km. ordinarily, the straight line distance between the start and finish points would be 756km.
Reported in January 2021
Tullow Submits Final Development Plan for Lokichar Oil Project in Kenya
Tullow Oil plc, a well-established, recognized oil and gas explorer and producer headquartered in London, UK, has submitted the final development plan (FDP) for the Lokichar Oil Project in Kenya
The FDP was deposited with the Ministry of Energy and Petroleum (MoEP), which generates policies that are designed to create an enabling environment for efficient operation and growth of the energy sector in the East African country.
The MoEP is therefore expected to undertake a review of the plan whose result will set the path for a potential final investment decision on the local oil exploits.
Raised stakes for the Lokichar Oil Project
The submission of the final development plan comes on the backdrop of the raised stakes for the Lokichar Oil Project following a redesign of the development in the first half of 202.
According to Tullow Oil, the daily output from the project increased to 120,000 barrels (bbls) from the previously estimated 72,000 bbls. The volumes of oil deposits also increased by 152 million barrels from 433 million barrels to a gross of 585 million barrels.
The raised stakes for the project cleared up doubts over the viability of the Lokichar Oil Project, which has remained in the exploration stage since the discovery of oil in the Lokichar basin back in the early 2010s.
The estimated cost of the implementation of the project
The multinational oil and gas exploration company estimates that it will spend roughly US$ 3.4bn to deliver the first commercial oil. This cost entails digging additional wells and the development of a pipeline connecting the Turkana oil fields and the port of Lamu.
According to the company, which in October 2021 announced that it was stepping up its search for a strategic partner to help it implement its development plan, it would cost approximately US$ 22 to produce a barrel of oil.
Tullow still searching for investors in Lokichar Oil Project in Kenya
The Lokichar Oil Project is still on hold pending the acquisition of investors. The Lokichar oil project entails the development of oil wells in Turkana and the construction of a crude oil pipeline to Lamu.
The project is estimated to cost US$ 3.4 billion. It is owned by African Oil, British oil exploration firm Tullow Oil, and Total. Currently, the stakeholders are searching for investors to carry out the project but none has been secured to date.