Kenya has entered into a joint partnership with the Tullow oil and Africa Oil Corporation to develop a crude oil refinery in Turkana and construct of a pipeline from Lokichar to Lamu.
The Heads of Term agreement was signed by Petroleum and Mining Cabinet secretary John Munyes who termed the development a significant milestone towards Kenya becoming a major oil exporter by 2022
The proposed refinery can processes 60,000 to 80,000 barrels of oil per day, and the partners can now source funds for the construction of the pipeline to ship the crude out of the region.
“The agreement provides a framework and commercial certainty required to move ahead with negotiating upstream and midstream long-form agreements ahead of the Final Investment Decision (FID),” Said Munyes.
Commercial quantities of crude oil in Kenya were discovered in 2012 in the South Lokichar Basin; the government has embarked on acquiring land that will be used in the next phases of the oil explorations in Lamu, Anza, Mandera, and Tertiary Rift sedimentary basins.
The pilot scheme was initiated last year when the first trucks transported crude oil from Turkana to the port of Mombasa for exportation.
One hundred fifty thousand barrels of oil were drilled in the early oil project, and the joint partners plan to flag off the first two hundred thousand barrels from the project later this year to test the market’s response.
“The infrastructure installed for the Foundation Stage will be utilized for the development of the remaining oil fields and future oil discoveries in the region, allowing the incremental development of these fields to be completed at a lower unit cost,” Tullow Kenya said in a statement.
