NAIROBI: The Hoima-Lokichar-Lamu crude oil pipeline is a priority project for the government as Kenya looks to tap the crude oil billions to accelerate development.
Speaking on Thursday at State House, Nairobi when he hosted a Japanese business delegation, President Uhuru Kenyatta said the pipeline will open up northern Kenya and accelerate the entire East African regional development. “The discovery of oil and gas in Kenya, Uganda, Tanzania and Somalia have opened up new areas of investments which could benefit from Japanese partnerships,” he said.
The pipeline is key topic among discussions at the Northern Corridor Integration Projects Summit next week in Nairobi. It is expected to serve Kenya, Uganda and South Sudan when complete. Ethiopia could also benefit from the same. Uganda and Kenya this month settled on the northern route for the pipeline following prolonged discussions that delayed reaching the agreement.
Next week, both countries will thrash out details on how Kenya will meet conditions set by Uganda as the deal was firmed. Uganda wants Kenya to guarantee transit fee or tariff not higher than any other alternative routes for the oil pipeline.
The latter should also ensure security on its side of the pipeline, financing arrangements and ensure no further delays in implementation of the project. The $4 billion Kenya – Uganda oil pipeline, should be complete by the year 2020 and ready for commissioning before Tullow starts pumping its first oil two years later.
Kenya has agreed to take the risk of Uganda’s conditions on the oil pipeline but this will only be determined by a detailed design on the actual construction of the line called the Front End Engineering Design (FEED).
Uganda also wants Kenya to guarantee security and commence the construction of the pipeline without delays. According to Mr Daniel Kiptoo, petroleum legal advisor for the Cabinet secretary for Energy and Petroleum, Kenya really pleaded with Uganda to settle on the northern route.
“Government is ready to face challenges that come with Uganda’s conditions. We are, however, guaranteed that the pipeline will be a great benefit to our northern counties,” said Mr Kiptoo. Talks at the upcoming summit will provide details on which designer will be awarded the tender for the FEED and in what proportions the finances for the pipeline will be shared.
President Kenyatta yesterday urged Japanese companies attending the meeting; Toyota Tsusho, Toyo Construction, Rohto Pharmaceutical, Sakai Heavy Industries, Mitsubishi Corporation, Mizuho Bank and Sumitomo Corporation among others, to keep investing in Kenya as lucrative infrastructure projects are planned.
