KPC Nears Acquisition of Mombasa’s Idle KPRL Refinery

Kenya Pipeline Company (KPC) is nearing an agreement to acquire the idle Mombasa refinery previously operated by Kenya Petroleum Refineries Limited (KPRL). With assets worth over Sh150 billion, KPC is financially robust enough to make the acquisition. Energy and Petroleum CS Davis Chirchir stated that discussions with the National Treasury are progressing and assured former KPRL staff of job security. KPRL ceased operations in 2014 as it became unfeasible to continue. The refinery, which occupies 370 acres, hasn’t been operational for nine years.

President William Ruto’s Cabinet greenlit KPC’s acquisition of KPRL through a share transfer on July 18. Chirchir, alongside KPC managing director Joe Sang, met with Mombasa political leaders, including governor Abdulswamad Nassir, and KPRL management to discuss the takeover. Chirchir envisions the acquisition as a means for KPC to augment its storage capacity and diversify, emphasizing Liquefied Petroleum Gas (LPG) facilities. The ex-Shell and BP-owned KPRL facility boasts 45 tanks with a combined storage capacity of 484 million litres. Chirchir aims to leverage this to alleviate supply chain issues and serve not just Kenya but neighboring countries too.

Governor Nassir voiced his intention to collaborate closely with KPC, ensuring sustainable development and city planning. He also highlighted the importance of reserving areas for amenities like schools and recreational facilities. Furthermore, a report from PricewaterhouseCoopers is anticipated, shedding light on the ideal mode for transferring assets from KPRL to KPC. Nassir also mentioned ongoing discussions with KPC about amplifying their Corporate Social Responsibility commitments in the county.

President Ruto has emphasized expanding LPG coverage nationally, prompting plans to erect more LPG storage tanks on KPRL-owned land. The Ministry of Energy is prioritizing the timely completion of this LPG project, aiming to provide Kenyans with cleaner cooking fuel options. Established to refine crude oil, KPRL halted operations in 2014, with the government acquiring it after the Indian firm Essar couldn’t rejuvenate it.