Kenya is moving forward with its plan to build a sh. 121.45 billion pipeline project from Lokichar to Lamu to boost its crude oil export s despite the downward spiral in prices of the commodity in the global market.
The project which has famously come to be known as project S, will be allocated a stumbling sh. 648.5 million in the financial year starting July 1. The allocation is in addition to the Sh. 777.5 million allocated in the current financial year to undertake research, feasibility studies, project preparation and design for the project.
So far, project S had been awarded 500 million in the current financial year as treasury segregated a further sh. 370 million for the early monetization of the oil project for the year starting on July 1.
Though it was thought to be a good investment for the country, two years ago, the oil prices have had a gigantic drop of $30 per barrel raising doubt over the viability of a capital-intensive infrastructure for a country with just about 560 million reserves.
The project is estimated to be completed by the second half of 2023 and not June 2022 as it had earlier been projected, should the tender awarding be done on time.
“We can conclude the award to EPC (engineering, procurement and construction) contractor in the second or the third quarter of the year and begin construction then,” Petroleum PS Andrew Kamau intimated.
The pipeline project is under a joint partnership between the Kenya government and the oil companies’ consortium of Tullow Oil Kenya B.V, Africa Oil Turkana Ltd and Total Oil (formally Maersk Oil).
