Kenya signs agreement for Lokichar-Lamu Crude Oil Pipeline study

Kenya has signed joint venture with three firms for a feasibility study for the proposed 820 km Lokichar-Lamu Crude Oil Pipeline to Lamu.

In a statement, the Energy and Petroleum Ministry said the study by the consortium includes Tullow Oil, Africa Oil and A.P. Moller-Maersk, would include a Front End Engineering Design (FEED) for the pipeline.

The joint development agreement (JDA) which provides a legal framework on the pipeline development will be followed by studies on the pipeline’s technical requirements as well as its financing and ownership structure.

It will allow important studies to commence such as Front End Engineering Design (FEED), Environmental and Social Impact Assessments (ESIA), as well as studies on pipeline financing and ownership. FEED, the engineering process that comes after the conceptual design or feasibility study, focuses on the technical requirements and approximate investment costs for a project.

The actual construction will depend on completion of FEED and ESIA which is likely to take less than a year.The pipeline – to run 820 km between Lokichar and Lamu on Kenya’s coast – would cost $2.1 billion and should be completed in the first quarter of 2021.

“It is the start of something important for the country in terms of moving forward in the Oil and Gas industry” said Martin Mbogo- Country Manager Tullow Oil.

Charles Keter, cabinet secretary for the Energy and Petroleum Ministry said, “The Government of Kenya is committed to the development of a modern midstream infrastructure to evacuate Kenyan crude oil to the international markets and this agreement marks a significant milestone to realizing this goal.”