Kenya Plans to Invite Bids for $1.1 Billion Pipeline Next Month

(Bloomberg) -- Kenya plans to invite bids next month for the development of a $1.1 billion crude pipeline as the East African nation prepares to start exports via the conduit in three years.

Construction of the approximately 820-kilometer (509-mile) pipeline from the oil fields in South Lokichar to the Indian Ocean port of Lamu may start in the second half of next year, according to Petroleum Principal Secretary Andrew Kamau. It could take three months to name a contractor and two years to build the pipeline required to transport oil from fields developed by Tullow Oil Plc and partners Africa Oil Corp. and Total SA, Kamau said in an interview in the Kenyan capital, Nairobi.

Kenya decided to build its own pipeline after neighboring Uganda in 2016 canceled an earlier initiative for them to jointly develop a conduit linking their oil fields to Kenya’s coast, in favor of a southern route through Tanzania. Kenya wants the pipeline to be ready when commercial production of its oil starts, probably as early as 2022.

READ: Tullow, Partners Agree Kenya Oil Terms, Seek Pipeline Funds

Kenya plans to own 25% of the pipeline, while Tullow and it’s joint-venture partners will hold the remaining stake, Kamau said. The government will finance most of its portion of the project with debt, he said.

Surveying the route for the pipeline and land acquisition is ongoing. A study on how the project will affect the environment will be submitted to conservation authorities in a month for consideration, according to Kamau.

To contact the reporter on this story: David Herbling in Nairobi at dherbling@bloomberg.net

To contact the editors responsible for this story: David Malingha at dmalingha@bloomberg.net, Helen Nyambura

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