The Energy and Petroleum Regulatory Authority has declined to clear the establishment of a gas plant and storage facility by Tanzanian billionaire Rostam Aziz.
Tanzanian billionaire's plan to build Kenya's largest gas facility runs into headwinds
Rostam Aziz, who was named Tanzania’s first dollar billionaire by Forbes, was seeking clearance to invest in Kenya’s LPG market
Aziz, who was named Tanzania’s first dollar billionaire in 2013 by Forbes, was seeking clearance to invest in Kenya’s LPG market which currently comprises 2.87 million households.
“We did not clear their Environmental and Social Impact Assessment (ESIA) because of certain technical deficiencies. The EIA had some technical deficiencies which we want them to address before we consider their application further,” EPRA explained.
Aziz currently runs the largest gas retailer in Tanzania but his quest to expand his reach to Kenya ran into headwinds.
The company had planned to kick off construction at Kenya’s Special Economic Zone in Dongo Kundu close to the Mombasa Port.
His entry into the Kenyan market would have had an impact on the Kenyan market, becoming the largest retailer with a 30,000-ton facility.
Currently, the leading local retailer has a storage capacity of 25,000 tonnes and is situated close to the proposed new gas plant site.
As of February 2022, Kenya was evaluating proposals from businesses looking to build eight privately operated cooking gas import ports.
Kenya currently imports Liquefied Petroleum Gas (LPG) through a privately-owned facility at the Port of Mombasa and the Port of Dar-es-Salaam, locking out competition that is key to lowering the cost of cooking gas.
About 40% of Tanzanian LPG companies' yearly volumes are exported to Kenya, illustrating the impact of the absence of competitive local shipping options.
In 2021, President Uhuru Kenyatta and Tanzanian counterpart Mama Samia Suluhu signed a Memorandum of Understanding on the construction of a natural gas pipeline between Dar es Salaam and Mombasa.
“We are friends in East Africa. Kenya leads in investments in my country Tanzania, and has invested in 513 projects worth $1.7 billion, providing employment to 51,000 Tanzanians,” President Suluhu said at the time.
“We also signed a gas pipeline deal today, which will transport gas between the coastal town of Mombasa in Kenya and Dar es Salaam in Tanzania.” The project will cost Sh121 billion ($1.1 billion) and cover 600 kilometres (373 miles),” she added.
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