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Kenya seeks to dominate in the supply of liquefied petroleum gas (LPG) by constructing the biggest import and storage gas facility in Mombasa. It is also licensing more private companies to compete with Tanzania which has dominated the business for years in the region
www.trendsnafrica.com has reported that there was a pitched competition between Kenya and Tanzania in the storage and evacuation of LPG. Towards that, Kenya is building the biggest import and storage gas facility in Mombasa. The strategy to put a stop to the Tanzanian domination does not end there. Kenya is also licensing more private companies to compete with Tanzania.
The Kenya Pipeline Company (KPC) will connect the Ksh42 billion new Kipevu Oil Terminal 2 (KOT) to the port of Mombasa to evacuate 25,000 tons of gas to be stored at Mombasa. Kenya has already banned the import of gas from Tanzania through the Namanga border.
A Pakistani firm; Petrochem Engineering Services, has been contracted to design an LPG import and storage facility in Changamwe, Mombasa. The facility in Mombasa once completed will help the loading of cooking gas for distribution by trucks which will help to cut demurrage costs, leading to lower prices for LPG by 30 percent.
KPC proposes to install, commission, and operate a 500 tonnes per day LPG truck loading facility, which will enhance product evacuation. Presently, the company receives imported LPG from ships berthed at the Shimanzi Oil Terminal. The product is then evacuated to local terminals through inter-connecting pipelines for truck loading and bottling.
Early this month, Kenya started a crackdown on gas importers from Tanzania. The country’s revenue authority said that the traders have been paying Value Added Tax (VAT) of eight percent instead of 16 percent. The facility in Mombasa once completed will quicken the loading of cooking gas for distribution by trucks which will help to cut demurrage costs.
Also Read:
https://trendsnafrica.com/kenya-to-build-the-biggest-import-and-storage-gas-facility-in-mombasa/
https://trendsnafrica.com/more-trade-barriers-eased-out-between-kenya-and-tanzania/
Kenya imports about 40 percent of gas annually from Tanzanian liquefied petroleum gas (LPG) firms via the Namanga and Holili border posts. The remainder is imported through the Port of Mombasa. The LPG cost in Mombasa is much higher than in Dar es Salaam LPG because the offloading and storage infrastructure at Dar es Salaam or Tanga ports is more efficient.
