Home Business Building of Sh40bn Mombasa oil terminal set to begin

Building of Sh40bn Mombasa oil terminal set to begin

by kenya-tribune


Port of Mombasa. FILE PHOTO | NMG 

Construction of the Sh40 billion Kipevu Oil Terminal (KOT) at the Port of Mombasa is expected to begin in earnest following the award of the contract to China Communications Construction Company.

Kenya Ports Authority (KPA) acting managing director Daniel Manduku said the contract was awarded after the tender committee completed due diligence weeks ago.

The new terminal will have the capacity to handle four vessels of up to 100,000 DWT (Dead Weight Tonnage) and will have a Liquefied Petroleum Gas (LPG) line that is expected to help stabilise gas supply in the country.

“We are soon embarking on construction of the Kipevu Oil Terminal (KOT) for discharge of fuel to the tanks owned by Kenya Pipeline Company and other oil companies at a cost of about $400 million (Sh40 billion),” Dr Manduku said.

Mombasa port currently has only two oil terminals that are ageing and too small to handle large quantities of imported oil and gas.

“The KOT will supplement the two facilities at Shimanzi and the old Kipevu terminal,” Dr Manduku said.

Construction of the oil terminals is part of KPA’s expansion programme that is seen to be critical to securing the country’s energy needs.

Dr Manduku said KPA has also started construction of the second container terminal using a Sh30 billion loan from Japan International Co-operation Agency (JICA).

Construction of the first phase of the second container terminal, with additional capacity of 550,000 twenty-foot equivalent units (TEUs) every year, is complete.

Dr Manduku said the second phase will offer additional capacity of 450,000 twenty-foot equivalent units’ containers when completed, taking the total capacity to one million twenty-foot equivalent units by 2021.

He said KPA has also initiated tendering for the building of Shimoni port in Kwale.

Shimoni which lies on the Kenya/Tanzania border serves as a fishing port, but will be upgraded to handle other imports.

“Shimoni is a fishing port so we will build a multi-purpose berth that will incorporate fishing and handle other cargo.’’

Work on the facility will be done under a public private partnership (PPP).

Later while addressing the 26th Conference of the International Association of Maritime Economists, Dr Manduku said the Port of Mombasa, which is the biggest and busiest in eastern and central Africa hopes to handle a total throughput of 31.48 million tonnes and 1.281 million TEUS this year.

Last year, the port handled a total throughput of 30.35 million tonnes and 1. 190 million TEUs.

Total throughput at the Mombasa port has continued to grow at the rate of eight per cent while container traffic has been growing at the rate of 7.4 per cent in the past five years.

“We have implemented a comprehensive ICT system that includes a terminal operating system and an Enterprise Resource Planning system (ERP) for back office operations,” Dr Manduku said, adding that this, together with the Integrated Security Systems (ISS) and modern cargo handling equipment has improved efficiency of operations, cargo clearance procedures and security.

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