Oil and gas

Kenya’s nascent oil and gas industry has become the new frontier that is attracting foreign investors as East Africa becomes the go-to location for oil and gas exploration. The international oil and gas investors are becoming increasingly fixed on East Africa following several discoveries of oil and gas in the region that could see the region become a major oil and gas exporter.

Oil and gas exploration in the country began in 1956 and the breakthrough came in March 2012 with the discovery of –Ngamia 1 Well, in Lokichar Basin in Turkana County. In the last decade, Kenya like its neighbours Uganda, Tanzania and Somalia has invested heavily on oil and gas exploration, but it was until recently when it discovered commercially viable oil and gas deposits in Turkana County and in Lamu basin in the coastal town of Mombasa. The country’s new oil discovery has awakened the appetite of international oil and gas investors key in oil and gas exploration in the country.

Though exploration of oil and gas in Kenya began as early as 1950s within the Lamu Ba-sin in the coastal town of Mombasa, it was till 2012 when the Kenyan government and its join venture partners, Tullow plc, Africa oil Corp and total discovered the first commercially viable oil deposits in Turkana County.

The oil reserves are estimated to be over 4 billion barrels of crude oil reserves in the Liokichar sub -basin in Turkana, with recovery oil estimated to be 750 million barrels.

The country’s new oil discovery has awakened the appetite of international oil and gas investors key in oil and gas exploration in the country

Kenya has four petroleum exploration basins namely Lamu Basin, Anza Basin, Mandera Basin and Tertiary Rift Basin. The discovery was followed by significant gas discoveries in offshore Lamu basin.

To ensure a sustainable oil production, Kenya has organized its petroleum sector into three sections: the upstream, mid-stream and down-stream.

The upstream section involves the process of exploration, development and production of crude oil and natural gas.

The mid-stream section revolves around storage, refining and transportation of crude oil into consumable petroleum products whereas in the downstream section, refined products are made available to the consumers through supply and distribution.

Since the discovery, Kenya has embarked on several projects aimed at overseeing sustainable, efficient and reliable production and distribution of oil in the region. For instance, the country is accelerating and improving oil handling, transportation, storage and distribution facilities in the region.

The country is also mobilizing con-tractors to extend existing oil product pipelines from Kenya to Uganda and Rwanda.

In 2015, Kenya crude oil pipeline plans faced a setback when the government of Uganda decided to abandon the proposed Uganda-Kenya crude oil export pipeline joint venture that was to run from Lake Albert, through Turkana to a new Lamu Port, and instead pump their oil via Tanzania. However, Kenya decided to go it alone by developing its crude oil pipeline, the Lokichar-Lamu Crude Oil Pipeline (LLCOP).

It is also known as the Kenya Crude Oil Pipeline, running for 892km and originating in the South Lokichar Basin, near the town of Lokichar, in Turkana County, in northwest Kenya, and ending at the new Lamu Port in Lamu County.

It is a sub-component of the broader Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) Corridor project. The LLCOP will be jointly developed by the Pipeline Project Management Team (PPMT) in con-junction with the LAPSSET Corridor Development Authority (LCDA).

The country has also embarked on enhancing storage capacity of petroleum products from 989,000 m3 to1,222,000 m3 and kick started the development of 20,000MT bulk LPG import handling facility at Mombasa.

The Ngamia-1 exploration well in Kenya marked the start of a significant programme of drilling activities across the acreage.

In 2012, the Ngamia-1 well success-fully encountered over 200 metres of net oil pay, the second East Africa onshore tertiary rift basin opened by Tullow. This has since been followed by further exploration success in the South Lokichar Basin at the Amosing, Twiga, Etuko, Ekales-1, Agete, Ewoi, Ekunyuk, Etom, Erut and Emekuya oil accumulations. In 2019 Kenya sold its first-ever crude export cargo, with ChemChina receiving a 240,000-barrel cargo sold at a US$3.5/b discount to Brent.

Tullow Oil, Africa Oil and Total are developing 600 million barrels of re-coverable oil at their Lokichar oilfields in northwest Kenya. Under the Early Oil Pilot Scheme, the partners trucked some 2,000 barrels per day (b/d) of crude from Lokichar to Mombasa for storage at a former refinery to build volumes for export.

Chinese and Indian refiners were seen as the main buyers of the crude. The partners expect the Lokichar fields to pump up to 120,000 b/d when fully developed.

Refining and beneficiation of oil & gas and minerals

Refining is the process of purifying an impure metal. It is to be distinguished from other processes such as smelting and calcining; in that those two involve a chemical change to the raw material, whereas in refining, the final material is usually identical chemically to the original one, only it is purer.

On the other hand, beneficiation is the treatment of raw material, such as iron ore, to improve physical or chemical properties especially in preparation for smelting. Kenya had a crude oil refinery at its port city of Mombasa but halted operations in 2013 after plans for a US$1.2 billion upgrade were abandoned on the advice of consultants determined that it was not commercially viable.

A bid to via a 2019 joint partnership with the Tullow Oil and Africa Oil Corporation to develop a crude oil refinery in Turkana and lay a pipeline from Lokichar to Lamu was also deemed not commercially viable. The proposed refinery was to process 60,000 to 80,000 barrels of oil per day.

Under the LAPPSET Corridor development plan detailed feasibility plans have been done for construction of 120,000 barrels per day refinery near the new Lamu port which will have a facility for export refined petroleum products.

Since the discovery, Kenya has embarked on several projects aimed at overseeing sustain- able, efficient and reliable production and distribution of oil in the region

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