Kenya Pipeline Company (KPC) is seeking a transaction adviser to help it conclude the takeover of the defunct state-owned Kenya Petroleum Refineries Limited(KPRL).
The Corporation has advertised for bids from eligible transaction advisers to help it acquire the refinery from the National Treasury.
KPRL was originally set up by Shell and the British Petroleum Company BP to serve the East African region in the supply of a wide variety of oil products.
After crude oil procesing was discontinued, KPRL signed an agreement with KPC in 2017 for a 3 year lease of its storage facilities.
KPRL was placed under the management of KPC in 2017 as a storage facility for imported crude oil after Indian investor Essar failed to revive Kenya’s only oil refinery.
KPC has been eyeing the oil refinery for years now
“Kenya Pipeline Company Limited intends to procure transaction advisory services for takeover of Kenya Petroleum Refineries Limited (KPRL) under the single source selection method as per the Procurement and Asset Disposal Act,” KPC general manager in charge of supply Peter Mwangi said in a notice dated February 7.
The state-owned pipeline firm expected to have received bids from possible advisors by February 11th, 2022.
“Under the guidance of the National Treasury we are now in the final stages of acquiring KPRL. The additional assets KPRL brings on board as well as its strategic location provides an opportunity not only
to enhance operational flexibility, but also the opportunity to explore other businesses such as trans-shipment and the development of a trading hub. Ensuring KPRL remains operational and grows is yet another example of how KPC is supporting government in meeting broader development goals,” said KPC Board in its 2020 Annual Report
Experts maintain that the impeding takeover of the refinery by KPC will significantly cut on perennial inefficiencies that characterise the petroleum products supply chain, which translate into high prices at the pump.
The increased storage capacity at KPC will also save oil marketing firms millions paid to shipping firms as demurrage charges.
The refinery became idle in September 2013 as Kenya opted to start importing processed oil.
The refinery has remained inactive since 2013, after plans to pump KSh121 billion into the plant to upscale its operations were abandoned.
Essar Energy became a 50% owner of 13 years ago after acquiring stakes owned by Shell Petroleum Company Limited, BP plc and Chevron Global Energy Inc.
ALSO READ:KPC Decommissions Kenya’s Oldest Pipeline
