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Kenya aims to begin exporting oil within months

1st February 2019

By: John Muchira

Creamer Media Correspondent

     

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Kenya is aiming to export its first consignment of crude oil in a few months, after amassing 60 000 bbl in storage tanks in the coastal city of Mombasa.

British firm Tullow Oil has revealed that the trucking of crude from oilfields in Lokichar, in north-western Kenya, for storage at the refinery in Mombasa under the Early Oil Pilot scheme (EOPS) has been progressing well, which has enabled the company to set a target of June for exporting the first consignment.

“The transfer of stored crude oil from Turkana to Mombasa by road continues as part of the EOPS, with an average of eight trucks dispatched every two days, transporting about 600 bbl/d. This is expected to increase to 2 000 bbl/d from April. Currently, there are 60 000 bbl of oil stored in Mombasa, with a maiden lifting expected in the first half of 2019,” says the company in its latest trading statement and operational update.

Under the scheme, Tullow is targeting the accumulation of at least 450 000 bbl of crude in Mombasa to enable Kenya to start exporting crude to international markets.

Kenyan authorities reckon that exporting crude is critical, as it is a precursor to the full development and commercialisation of the crude oil business.

Tullow, which has discovered an estimated 1.2-billion barrels of oil reserves in the East African nation, is already preparing for full production, with plans to spend $70-million as part of Kenya’s predevelopment expenditure this year.

Kenya is targeting to start commercial production of crude in 2021, when an 892 km pipeline running from the oilfields to a new port in Lamu is expected to have been completed.

British firm Wood Group is currently undertaking the front-end engineering and design work for the $2-billion project.

“Tullow made substantial progress in Kenya in 2018 and continues to target a final investment decision in late 2019 and first oil in 2022,” says the company.

It adds that this will require several key milestones to be achieved throughout 2019, including land acquisition, commercial frameworks and contract awards.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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