Nigeria’s Dangote breaks ground on $16-B East <a href="https://absafricatv.com/alert-to-the-ngo-forum-and-89th-session-of-the-african-commission/” title=”Alert to the NGO Forum and 89th session of the African Commission”>African oil refinery in Kenya
- Dangote and Kenya aim to replicate success of Nigerian refinery
- East African governments have been offered a combined 30% stake
- Doubts remain over crude oil supply and energy infrastructure
Construction begins on Wednesday of a $16-billion Kenyan oil refinery aimed at lowering East Africa’s fuel costs and saving the region hard currency used to import refined products.
Aliko Dangote and Kenyan President William Ruto broke ground on the site, where the billionaire wants to replicate his group’s 700,000-barrel-per-day Nigerian refinery as countries including Kenya and Uganda look to start producing crude oil.
Dangote, Africa’s richest man, has offered regional governments a combined 30% stake in the Kenyan refinery, which is scheduled to be completed in 2030.
Dangote has awarded Engineers India Limited a $450 million project engineering contract while Honeywell Technologies will provide technological support.
The refinery, whose shares will eventually be listed on the Nairobi bourse, is the largest-ever foreign direct investment for Kenya, and it will boost the country’s annual gross domestic product by 12%, Ruto said at the launch ceremony.
“It is an investment in energy security, industrialization and regional integration,” he said.
The project will create energy self-sufficiency in a region stretching from Ethiopia to Mozambique, Dangote said, by replacing imports of refined products.
“We are breaking ground for a new chapter in Africa’s industrial journey to a brighter future,” he said.
Construction equipment spurs hope. Dangote and Ruto were joined by Ethiopia’s Prime Minister Abiy Ahmed, Uganda’s President Yoweri Museveni, Benin’s President Romuald Wadagni and Togo’s President Jean-Lucien Savi de Tové for the ceremony at the port of Lamu, ringed by a row of excavators, graders, rollers and cranes.
“I am very hopeful when I see these machines lined up here because I know I have a chance to work and change my life from my menial jobs now to become a machine operator which is what I’m trained to do,” said local resident Evans Hundo.
Situated along Kenya’s northern shoreline, Lamu Port, which welcomed its first cargo ships in 2021, is central to Kenya’s bid to open a new transport corridor linking its vast northern region and neighboring countries to the sea.
The refinery is expected to boost that initiative, while addressing annual demand for petroleum products in the region which Ruto’s chief economic adviser, David Ndii, said is estimated at 20 million to 30 million metric tons.
Meeting that demand would require capacity of more than 1 million bpd, said a financier involved in African refineries.
East Africa has been hit hard by surging fuel prices resulting from the Iran war, sparking deadly protests in countries such as Kenya over rising pump prices.
The refinery will also aim to export jet fuel to the European and British markets, Dangote said.
Testing Nigerian model. Oil industry analysts say it is not a given that the new Kenyan project can replicate the Nigerian model, which turned the West African country from a major fuel importer into a growing exporter.
Officials have said the facility is also expected to spur industries such as petrochemicals, base oil and bitumen production and create more than 50,000 jobs.
It will be powered by a 1,000-megawatt power plant to be built as part of the refinery complex, Dangote said. The plant will sell its excess power to other customers.
But doubts remain over local crude supplies and the region’s energy infrastructure, while the project also faces opposition from environmental campaigners, who fear it could affect Lamu Old Town, a World Heritage site hosting fragile marine life.
Kenya’s High Court ordered the preservation of parts of the site pending a hearing in a case brought by local residents.
Dangote attributed the opposition to traders and businesses whose profit models would be threatened by the refinery, but promised to put up a fight.
“We are really not scared about people taking us to court,” he said. “Anybody who wants to cause trouble, we are ready for his trouble and we will give him a headache.”
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