Construction of Mombasa LNG plant to start in August

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

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.

READ: Uhuru strikes deal for Mombasa gas-fired power plant

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.