Dangote says Kenya court ruling will not halt Lamu refinery groundbreaking

Dangote Group said a Kenyan court ruling over a land rights dispute will not halt the groundbreaking ceremony for its planned 700,000-barrel-per-day (bpd) oil refinery in Lamu, although some activities at the site could be affected.

According to a Reuters report, the Malindi Environment and Land Court ordered that the “status quo prevailing” on the disputed land be maintained until a hearing scheduled for October 14.

The case was filed by 133 residents of Chandavai in Lamu County, who claim the land earmarked for the refinery is part of their ancestral heritage and has been occupied and farmed by their families for generations.

Dangote Group said the court order does not prevent the planned groundbreaking but requires both parties to refrain from activities at the site until the case is heard.

Court order affects site activities

The Malindi Environment and Land Court issued the order on September 25, although it was only made public on Monday. The directive requires the parties to maintain the existing situation on the disputed land pending the October 14 hearing.

Dangote Group said the ruling does not amount to a halt of the refinery’s groundbreaking ceremony at this stage, but acknowledged that it could affect activities at the project site.

• “The court has not halted the groundbreaking ceremony of the refinery at this stage,” Dangote Group said in a statement.

The company added that activities at the site may be affected because both parties are required not to carry out activities until the October 14 hearing.

The lawsuit was brought by 133 Chandavai residents who say the land is ancestral property that has been occupied and cultivated by their families for generations.

The dispute therefore creates a legal issue around the use of the proposed refinery site, while the planned groundbreaking remains scheduled to proceed according to Dangote Group.

Lamu refinery targets 700,000 bpd

The planned Lamu refinery is intended to have a processing capacity of 700,000 barrels of crude oil per day and replicate the scale of Dangote’s refinery near Lagos, Nigeria.

• Dangote’s Lagos refinery has helped increase Nigeria’s domestic refining capacity and contributed to the country’s shift from dependence on imported refined petroleum products towards growing exports.
• The Lamu project is planned for Kenya’s coast and is expected to have a capacity of 700,000 bpd.
• Unlike Nigeria, Kenya currently has no commercial oil production, creating a different crude-supply environment for the proposed refinery.

Dangote has estimated the cost of the Lamu refinery at between $15 billion and $16 billion.

The company hopes to complete the project by 2030.

The proposed facility would therefore be developed in a country that does not currently produce oil commercially, unlike Nigeria, where Dangote’s existing refinery has access to a much larger domestic oil-producing environment.

Dangote refinery expansion follows Lagos IPO

The Lamu project comes as Dangote Group continues to expand its position in Africa’s energy sector following the development of its large-scale refinery in Nigeria.

Earlier in September, Dangote launched an initial public offering for its Lagos refinery in what Reuters described as Africa’s biggest-ever share sale.

The Lagos refinery, with a capacity of 700,000 bpd, is the model for the proposed Lamu facility. Dangote’s planned investment in Kenya would extend the group’s refining ambitions beyond Nigeria and create another large-scale petroleum-processing operation on the continent.