Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


Future of Mombasa refinery uncertain

22 May 2013, 10:16

Mombasa - The future of east Africa's only oil refinery, Kenya Petroleum Refineries Limited, could be decided next week when a report is due on whether to upgrade the aging Kenyan plant or turn it into a storage facility.

Fuel distributors have long complained about the poor quality products from the 50-year-old refinery in Mombasa and want it closed so they can buy cheaper and better imports. Under Kenyan law, they are obliged to buy its fuel.

India's Essar Energy, which co-owns the refinery with the government, has said it wants to raise $1.2 billion for a substantial upgrade.

Linus Gitonga, director of the Energy Regulatory Commission (ERC), said the refinery would be converted into 'something more useful', including a storage facility, if the proposal for its upgrade turns out to be uneconomical.

"The report on an upgrade feasibility study will be out by this month end, and we will use it to decide whether it is economical to do an all new refinery, upgrade the existing one, or convert it into a storage facility," Gitonga said.

"If we don't get finance for the upgrade, we could turn it into an import storage facility, a strategic national storage facility, a regional storage facility, or we could as well lease it out to interested marketers for storage only," he added.

Fuel distributors say the refinery is operating below its 35,000 barrels per day capacity and some have threatened to boycott it. The ERC has said dismantling the facility completely is out of the question.

Gitonga said the fuel distributors are receiving compensation for losses due to refinery inefficiencies and urged them to understand the importance of the plant, which employs 250 people, for the government.

Khohn Crippen Berger, a UK-based firm, has been contracted to carry out an upgrade feasibility study of the refinery and its report will be discussed at a shareholder's meeting to be held at the end of May.

Essar Energy plans to increase the refinery's crude handling capacity to 4 million tonnes of crude per year by 2018 from 1.6 million now.

- Reuters


Read News24’s Comments Policy

Comment on this story
Comments have been closed for this article.

Read more from our Users

Submitted by
Wilson Ochieng
Apologise for attack on Auditor G...

Apologise for attack on Auditor General, President Uhuru Kenyatta is told by Kisumu Senator Anyang Nyong'o. Read more...

Submitted by
Wilson Ochieng
Quit if you can't fight corruptio...

An MP has told President Uhuru Kenyatta to quit office if he cannot fight corruption. Read more...

Submitted by
Wilson Ochieng
Investigate Uhuru, Ruto for corru...

Investigate President Uhuru Kenyatta and DP William Ruto's offices over corruption, CORD leader Raila Odinga has said. Read more...

Submitted by
Victor Tinto
Its a 1 horse race to State House...

Its a 1 horse race to State House, DP William Ruto has mocked the CORD Coalition. Read more...

Submitted by
Victor Tinto
Enjoy your time left in power, We...

CORD Co Principal Moses Wetangu'la has told the Jubilee Coalition to enjoy its last few months in power before it is voted out in the 2017 elections. Read more...

Submitted by
Victor Tinto
Stop hiding in State House and sa...

ODM MP's have called on President Uhuru Kenyatta to release drought aid and to stop sitting on public funds. Read more...