Kenya Pipeline upgrades its oil storage facility :: Kenya

Kenya Pipeline Company (KPC ) has increased its storage capacity of diesel and gasoline by more than half.

This comes as the oil company struggles to recover its lost market share in the region.

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Exported volumes decreased by 3% to 2.7 tonnes in June 2017, compared to 2.8 million tonnes the previous year.

The company, which had hitherto been prone to fuel shortage, said in a statement yesterday that it has completed the construction of four storage tanks for a cost of 5 , 3 billion shillings.

New capacity

According to the company, additional tanks with a capacity of 133 million liters of fuel more than doubled the storage capacity of diesel and super gasoline, from 100 million liters to 233 million liters, thus offering a higher reception capacity. The new 20-inch pipeline will provide reliable transportation in the region over the next three decades, "the statement said.

KPC General Manager Joe Sang said the new reservoirs would improve operational flexibility and increase reservoir rotation at the Kipevu oil storage facility in Mombasa. The construction of the tanks, located at KPC's Nairobi terminal, began in November 2014, following the award of the contract to an Indian company, Prashanth Projects Ltd.

Inspecting the new tanks last week, John Munyes, Minister of Petroleum and Mines, said the tanks would increase KPC's overall storage space by more than 20 percent from 612.3 million liters to 745 million liters.

"The KPC has solved the problem of the trough deficiency, which limited the economies of scale with respect to the logistics of oil supply.We are talking about a bright future in the national and regional oil trade, "said Munyes.

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Marine tanker owners charge traders demurrage charges of about one shilling per liter due to an insufficient trough. Demurrage charges are incurred when ships are waiting at the port of Mombasa to unload fuel into the KPC system due to insufficient capacity.

According to KPC, the new facilities will serve Kenya well and the region's oil demand is expected to reach 11.4 billion liters in 2020.