A logistics firm, Focus Container Freight Station Limited plans to set up a new cooking gas storage plant in Kipevu, Mombasa, hoping to join the race for a pie of Kenya’s budding liquefied petroleum gas (LPG) market.
“The proposed project aims to build a 15,000 metric tonnes bulk LPG storage facility with six mounded LPG spheres, each with a capacity of 2,500metric tonnes,” the company associated with Mombasa businessman Faisal Abass said in a regulatory filing.
The Focus Container Freight Station Limited’s facility, which is estimated to cost Sh354.25million, would join a chain of projects through which investors seek to open up a market currently controlled by African Gas and Oil Company which is owned by Mombasa-based tycoon Mohammed Jaffer.
Other players including Lake Oil and Taifa Gas owned by Tanzanian tycoons Ally Edha Awadh and Rostam Aziz, respectively, are among private and government-owned firms seeking to set up LPG facilities at the Coast.
Nigerian oil marketing company-Asharami Synergy also targets to build a Sh17.7 billion common-user cooking gas importation facility at the coast under a Build-Operate-Transfer model—a contract whereby, an entity—usually a government—grants a concession to a private company to finance, build and operate a project.
The company operates the project for some time (20 or 30 years) to recoup its investment, then transfers control of the project back to the public entity.
The planned common-user LPG facility in Changamwe, expected to have a capacity of 30,000 tonnes will allow the government to bring importation of cooking gas under the open tender system and ultimately control the prices of the commodity.
The Kenya Petroleum Refineries Limited last week revealed it would lease out about 23.19 acres of land to Asharami Synergy for the LPG facility project for 31 years.
The common-user LPG facility in Mombasa once completed will accelerate the loading of cooking gas for distribution by trucks which will help to cut demurrage or storage costs.
A regulatory filing to the National Environment Management Authority (Nema) shows that the planned Changamwe common-user facility will mainly receive supplies from pressurised LPG ships berthed at the Sh42 billion newly constructed Kipevu Oil Terminal 2 (KOT-2) jetty using a pipeline being constructed from common user manifold located next to the Kenya Pipeline Company (KPC) installation.
KPC contracted a giant Pakistani firm; Petrochem Engineering Services to design an LPG import and storage facility in Changamwe, Mombasa.
KPC projects that faster loading is expected to translate to lower prices for LPG by 30 percent once operational as oil marketing companies pass the benefits of reduced demurrage costs to consumers.
Data by the Energy and Petroleum Regulatory Authority shows that LPG consumption in Kenya hit 414,861 tonnes in 2024, up from 360,593 tonnes the previous year.
