Kenya is negotiating with a subsidiary of Nigeria’s Sahara Group Ltd. to jointly construct a 30,000-ton facility for handling and storing liquefied petroleum gas (LPG), according to sources familiar with the matter.
The deal involves state-owned Kenya Pipeline Co. forming a joint venture with Asharami Synergy Plc to construct a common user terminal, which will be East Africa’s largest LPG storage and bottling facility, in the port city of Mombasa, according to a Bloomberg report.
The facility, expected to take 24 months to build, will be financed by Asharami, one of the sources said, adding that the deal is anticipated to be signed by the end of July.
Kenya Pipeline Co. will provide the land for the project, located on the port side.
The project is expected to help the East African nation achieve universal access to clean cooking energy by 2030.
What Kenyan Government is Saying
President William Ruto has been advocating for Kenya to become a leader in green energy in Africa.
As part of this initiative, he aims to double the current per capita usage of LPG, which stands at 7kg.
Kenya Pipeline Managing Director, Joe Sang, informed Bloomberg that the country is also actively working to bring a private sector company on board for the new cooking-gas facility.
In a bid to enhance the LPG supply and lower fuel prices, Kenya is also negotiating with Saudi Aramco.
The discussions are focused on acquiring a floating LPG barge.
Sang said Kenya’s efforts to improve its energy infrastructure and support the President’s green energy goals.
What you should know
Nigeria, as Africa’s largest oil producer, has considerable expertise in the energy sector.
Sahara Group Ltd., a leading energy conglomerate based in Nigeria, has been instrumental in driving innovation and growth within the continent’s energy markets.
Sahara’s subsidiary, Asharami Synergy Plc, specializes in the distribution and storage of petroleum products, including LPG.
According to latest data by the Nigerian Upstream Regulatory Commission (NURPC), Nigeria’s crude oil reserves stands at 37 billion barrels. On the other hand, the country has a gas reserve of about 202 trillion cubic feet (tcf) and recoverable of about 139.4 tcf.
The shift to gas has also been consolidated by president Tinubu with the signing of new executive orders to boost the gas industry in the country.
In Kenya, over 90% of rural households in the country rely on biomass, such as wood fuel and charcoal, for cooking, according to the Energy Ministry.
By increasing the availability and use of liquefied petroleum gas (LPG) through partnership with Nigeria, the project will reduce the dependence on biomass. This shift is expected to improve air quality and public health, especially in rural areas.
The joint venture represents not just a significant investment but also a commitment to improving energy security and sustainability across the entire Africa.
