Oil pipeline. Kenya is expected to award a tender for the design of a
crude oil pipeline from the Turkana oilfields to Lamu in February.
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Kenya is expected to award a tender for the design of a crude
oil pipeline from the Turkana oilfields to Lamu next month, after the
project received backing from French firm Total.
Eight
companies that were prequalified from the expression of interest floated
in 2016 were invited on January 18 to tender for front-end engineering
design (Feed) of the 855-kilometre pipeline that is expected to cost
$2.1 billion.
The Feed helps set the technical requirements for the line, which are then used to estimate the cost of the project.
“It
should take nine months after awarding of the tender to completion of
the design,” said Ministry of Energy Principal Secretary Andrew Kamau.
Tullow
Oil, Africa Oil Corporation and Maersk Oil have found 750 million
barrels of waxy crude in South Lokichar basin, straddling blocks 10 BB
and 13T in Turkana county. The first discovery was made in March 2012.
Total commitment
Total SA of France, which is interested in Maersk’s 25 per cent
equity in onshore blocks 10BA, 10BB and 13T in Kenya, has made a
commitment to support the Lokichar-Lamu pipeline as the only evacuation
route for Kenya crude.
“Following Total’s commitment,
the government has consented to a proposed acquisition of the issued and
to-be-issued share capital of Maersk in respect of blocks 10BA, 10BB
and 13T,” the government said.
Total is also
participating in the development of the Hoima-Dar es Salaam pipeline for
evacuation of crude from the Albertine basin in Uganda to export
markets, through Tanzania.
Final investment decision
Mr
Kamau said completion of Feed will pave the way for the final
investment decision to be made. Construction of the crude oil export
pipeline is slated to start in 2019, and be completed in two years.
“The pipeline will be financed by local and international funds to enable Kenya to earn revenue from crude oil,” Mr Kamau added.
The FEED contract was to be awarded in mid 2017 for building work to start this year and finished in 2020.
The
delay in awarding the FEED contract was because the Energy Ministry,
Tullow and other partners took longer than expected to negotiate the
terms.
An environmental and social impact assessment of pipeline is expected to start in March.
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