Kenya's crude oil pipeline takes shape after Tullow and Kenya signs USD2B pipeline deal

Kenya’s crude oil pipeline has taken shape after British oil explorer Tullow on Tuesday signed agreement with Kenya, paving the way for preliminary works on the planned line expected to be completed in four years.

The pact envisions the legal and technical roadmap for the project’s early works such as mapping out the route for the pipeline and environmental assessment for compliance.

“This joint development study agreement provides the framework for the pipeline development,” said Energy Secretary Charles Keter said today.

Mr. Keter said the framework now gives the ministry leeway to start inviting investor bids from next week to prepare the pipeline’s design, dubbed front end engineering design (FEED), and carry out an environmental social impact assessment (ESIA) study.

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The line is expected to be completed in 2021 at a cost of Sh210 billion ($2billion), making it the second most expensive infrastructure project after the Mombasa-Nairobi standard gauge railway (SGR).

However, until the pipeline is complete, Kenya plans to move between 2,000 and 4,000 barrels of oil per day using trucks mounted with oil tank-tainers (150 barrels).

Tullow Oil has since 2012 struck 750 million barrels of the black gold, considered commercially viable, leading to plans of constructing the 865-kilometre pipeline from Lokichar, Turkana, to coastal Lamu town.

The British company has been exploring and developing the Turkana oilfields jointly with partners Canada-based Africa Oil and Danish firm Maersk.

Kenya was forced to go it alone in building the pipeline after oil-rich Uganda, which originally favoured a route though Kenya developed cold feet in the last minute and said it would build its line through Tanzania.