Politics and policy
Electricity generated at the at LNG plant will be sold to Kenya Power. Photo/FILE
By KENNEDY SENELWA
Posted Monday, June 30 2014 at 12:09
Posted Monday, June 30 2014 at 12:09
In Summary
- The groundbreaking ceremony for the 800MW plant will be held on August 27, once the government concludes the tender award process.
- The winner of the tender will build a floating storage and re-gasification unit to handle liquefied natural gas imported from Qatar on government-negotiated terms.
- The electricity generated will be sold to Kenya Power for distribution under long-term power purchase agreement signed by the two parties.
Construction of the natural gas-fired power generating plant at Dongo Kundu in Mombasa will commence in August.
According to Ministry of Energy officials, the
groundbreaking ceremony for the 800MW plant will be held on August 27,
once the government concludes the tender award process.
The investor will finance construction of the plant and the electricity generated will be sold to Kenya Power for distribution under long-term power purchase agreement signed by the two parties.
The Dongo Kundu plant is one of several projects
aimed at injecting 5,000MW of power into the national grid under a
public private partnership framework by 2017, to reduce the cost of
electricity to $0.07 per kilowatt hour.
The winner of the tender will build a floating
storage and re-gasification unit to handle liquefied natural gas
imported from Qatar on government-negotiated terms. Kenya and Qatar have
already signed an agreement for supply of the gas.
Kenya’s interconnected power system currently has a
capacity of 1,664MW — 770MW hydro, 241MW geothermal, 622MW thermal,
26MW co-generation and 5MW wind.
The recorded peak electricity demand is suppressed
at 1,357MW, and the unsuppressed demand is estimated at 1,700MW, a
shortfall of 536MW, after providing for a 30 per cent reserve margin.
On January 27, the Ministry of Energy issued a request for proposals (RFP) from 12 firms that had been prequalified to bid for the project either individually or as a consortium.
Six submissions were received when the RFP closed
on April 15, to allow for evaluation of technical proposals prior to
successful firms being notified to go for opening of their financial
proposals. In keeping with the law, bids go through evaluation before a
winner is determined within 21 days.
Bidders who submitted proposals for the project
include Mitsui & Co. Europe Plc, Marubeni Corporation, EnerGas Kenya
as a consortium with Aldwych International Ltd, Gasal Plc and Metka.
Quantum Power East Africa partnered with Watsila
Finland OY, Goalar LNG Ltd and Rs Platou ASA. Shanghai Electric Power
Co. Ltd teamed with AVIC International Holding Corporation, Cistenique
Investment Fund BV and Wison Offshore & Marine Co. Ltd.
China Petroleum Pipeline Bureau bid with China
Tianchen Engineering Corporation for the plant that will initially use
imported LNG later convert to using commercial natural gas discovered in
the Lamu basin.
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