In a surprising development, the Kenyan government has decided to cancel the Kenya Pipeline Company’s (KPC) plan to build a large cooking gas facility in Mombasa. Instead, they will give the project to a private Nigerian energy company called Asharami Synergy.
The announcement was made today, and it means that KPC, which is owned by the government, will no longer be in charge. Instead, the government will lease the project for 31 years to Asharami Synergy, which is part of the Sahara Group from Nigeria.
The new facility was meant to improve Kenya’s supply of liquefied petroleum gas (LPG) and was initially being managed by KPC on land owned by its subsidiary, Kenya Petroleum Refineries Ltd. (KPRL), in Changamwe, Mombasa.
However, the Ministry of Energy and Petroleum worked with the National Treasury to instruct KPC to stop its plans in 2024, allowing for a private company to take over.
Asharami Synergy was chosen through a competitive selection process to build and run a storage and handling plant for 30,000 metric tonnes of LPG. This will be done using a public-private partnership (PPP) model.
KPC had already spent Ksh 192.64 million on initial studies for the project, raising questions about whether that money will be refunded and what this change means for taxpayers.
The Auditor General has pointed out this expense in a review of KPC’s finances for the year ending June 2024, which has drawn attention to this decision.
KPC stated, “The government decided to create facilities for LPG that everyone can use, led by the private sector.” Asharami Synergy will lease 23.19 acres of KPRL land for the next 31 years to carry out the project.
This company is already involved in Kenya’s fuel import market through a government deal and is expected to fund and build the facility. This project is part of President William Ruto’s plan to provide cleaner cooking energy for everyone.
President Ruto aims to double the amount of LPG used in Kenya from 7 kilograms to 15 kilograms per person by 2030, ensuring that everyone has access to clean cooking energy.
Local energy expert Peter Mwangi called this move a “practical choice” to make use of private sector skills. However, he also expressed concerns about transparency, saying, “The cancellation of KPC’s plan raises questions, especially since public money has already been spent. Kenyans deserve to know how this benefits them.”
This decision is part of larger efforts to improve Kenya’s energy infrastructure, which includes talks with Saudi Aramco about creating a floating LPG facility.
Additionally, Asharami Synergy’s role highlights the growing energy relationship between Nigeria and Kenya. The new facility in Mombasa is expected to become the largest LPG storage and bottling plant in East Africa once it is completed.
