PEAK:: PROCESS :: PERFORMANCE ::™
CABINET APPROVES Sh.22 BILLION FOR REFINERY UPGRADE
The Cabinet yesterday approved the planned upgrade of the
Mombasa-based refinery at a cost of $322 million(Sh22 Billion Kenyan
Shillings). Improvements of the efficiency and infrastructure at the
refinery is part of a plan to meet growing demand from landlocked
neighbours Uganda, Rwanda, Burundi and DRC.
A statement from the Presidential Press Service said the plan had
been approved during a cabinet meeting held at State House Nairobi.
The financing plan is based on a report by a group of consultants,
who had also said building a new refinery would cost a whopping
$1Billion (Sh70 Billion Kenyan Shillings).
"The Cabinet resolved that the modernisation option was more cost
effective," the statement said. of the Sh22 billion, Sh14 billion
will go towards the actual upgrade of the refinery and investment in
clean fuel technology, Sh3.1 billion to build facilities to import,
store and transport liquid petroleum gas.
Another Sh1.5 billion will be used to build the first phase of
improving the refinery terminal, while the rest of the amount is
financing and interest charges during construction. The Kenyan
Petroleum Refineries has a capacity of 3 million tonnes per year
(about 60,000 barrels per day) and half is owned by the Kenyan
Shell, British Petroleum (BP) and Caltex - part of the US company
Chevron corporation hold the remaining shares. The statement added
that the government will look for partners to help fund the upgrade
through competitive bidding and will retain its 50 percent stake in
the refinery. Once the upgrade is complete, it will produce
low-sulphur diesel and better quality unleaded gasoline.
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