Sri Lanka firm eyes Kenya’s LPG market

Sri Lankan liquefied petroleum gas (LPG) supplier LAUGFS Gas has announced plans to venture into Kenya as it seeks to tap the region’s fast growing market.

The Colombo Stock Exchange-listed firm did not provide timelines for its Kenya entry but said its Mombasa operations would serve as a base for expanding into East Africa.

“The company also plans to venture into Myanmar and Kenya in East Africa to supply LPG,” LAUGFS Gas PLC chairman Wegapitiya Kattadiyalage H. Wegapitiya was quoted as saying by local Sri Lankan media.

“Mombasa is a gateway to other landlocked East African countries. We are exploring venturing into Mombasa as well. Initially we want to supply in bulk.” Mr Wegapitiya said the Kenya entry will take place after the call for commercial operations of its newly constructed Sh8 billion LPG storage plant at Bangladeshi port, the Hambantota Terminal.

The firm has risen to be a dominant player in Bangladesh’s energy sector since it ventured into the country a few years ago and it seeks to replicate similar success in Kenya.

Private companies have been angling to benefit from growing use of cooking gas in Kenya in the absence of investments by the government via import and storage facilities.

Last year, Mansa East Africa sought the National Environmental Management Authority’s (Nema) greenlight to construct a facility to handle 10,000 tonnes of LPG.

This was the second firm to seek Nema’s nod to build such as facility in Mombasa in 2018 after the Mombasa Gas Terminal (MGT) which plans to put up a Sh8 billion LPG handling facility.

There are limited LPG handling facilities in Kenya which has exposed the market to supply shocks and stunted the growth of cooking gas consumption.

Cooking gas imports rose by 39.2 per cent in the first three quarters of 2018 to stand at 70,574 tonnes following the ban on logging.

The embargo effected last February by Environment secretary Keriako Tobiko has disrupted availability of sawdust, charcoal and wood fuel — sourced from government forests — forcing Kenyans to use cooking gas for domestic and commercial purposes.