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{UAH} Kenya prepares to export oil this month-where does this leave uganda oil?

Kenya prepares to export oil this month

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An oil rig worker at Ngamia III exploration site in Nakukulas village, Turkana, northern Kenya. FILE | NATION MEDIA GROUP 


Posted  Monday, May 15   2017 at  19:12

In Summary

  • Tullow signs deal with firms to transport crude oil from Turkana to Mombasa port
  • The UK explorer signed contracts with Oilfield Movers and Multiple Hauliers EA to carry the crude

Tanktainers with a heating mechanism to keep the waxy crude viscous until it reaches refineries and trucks to transport the oil from the fields in Turkana, northern Kenya, are already on standby as the country prepares to send its first consignment to the export market this month.

The EastAfrican has learnt that UK explorer Tullow Oil signed contracts on May 5 with Oilfield Movers and Multiple Hauliers EA to carry the crude from Lokichar to the Mombasa port.

Tullow also signed a contract with Primefuels Kenya for providing tanktainers with heating facilities that help keep the waxy crude viscous until it reaches refineries. The three companies were tasked with delivering the first consignment to Mombasa before the end of this month.

"Multiple and Oilfield will each supply 25 trucks. Primefuels has been selected to supply tanktainers. These companies submitted bids that scored the highest on technical and commercial compliance," said Tullow Kenya country manager Martin Mbogo.

The three firms were picked from a list of 45 local companies that expressed interest in moving the crude under the Early Oil Production Scheme (EOPS) when the tender was floated in October last year.

Industry sources said Oilfield and Multiple would start mobilising trucks to South Lokichar this week while Primefuels already boasts 30 tanktainers, 10 of which are being customised.

Each tanktainer will carry 130 barrels of crude oil and has to be secured on a flat-bed truck. About 60,000 barrels are said to be already stocked in Lokichar for transportation to the Kenya Petroleum Refineries at Changamwe in Mombasa, from where they will be exported through the Kipevu Oil Terminal jetty.

The first cargo

"Preparations for trucks to deliver the first cargo of crude oil to Mombasa are in high gear. The first fleet will depart from Lokichar before end of May but the actual date remains a guarded secret of the Ministry of Energy," industry sources said.

The export scheme seeks to test the demand for Kenyan oil in the global market, pending full field development that includes the building of a pipeline connecting the Turkana oilfields to Lamu port.

"Evacuation of crude oil from storage tanks in Lokichar will allow Tullow to continue with well tests and set up production facilities. Results from EOPS will inform planning for future progress of oil and gas operations," he said.

Simmons & Simmons, an international law firm based in London, is advising Kenya on aspects of commercialisation of the crude oil.

In February, the government said that samples of the oil delivered to Asian and European refiners had excited the market due to its low sulphur content, which made it easier to refine.

Kenya's Petroleum Principal Secretary Andrew Kamau said refiners in Asia and Europe had acknowledged the good quality of the fossil fuel after receiving samples of crude oil from Turkana County.

"European and Asian refineries are receptive to our crude oil, which is low on sulphur content, making it easier to refine. It is not appropriate to disclose the identity of the refiners because of ongoing discussions," he said.

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