Africa’s Richest Man Proposes To Build 700,000 Bpd Oil Refinery In Kenya

What the report says

OilPrice.com reported that Nigerian billionaire Aliko Dangote is proposing a $17 billion oil refinery on Kenya’s Lamu Island, with planned capacity of 700,000 barrels per day. The project, attributed to Dangote, would be designed to process crude for Kenya and neighboring markets including Uganda, South Sudan, Rwanda, Burundi and the Democratic Republic of Congo.

According to the report, East Africa has crude oil and natural gas resources but remains dependent on imported refined fuels after Kenya Petroleum Refineries Limited, described as the region’s last operating refinery, shut in 2013. OilPrice.com cited the African Energy Commission as estimating roughly 4.7 billion barrels of crude reserves and more than 70 trillion cubic feet of gas across Uganda, South Sudan, Kenya and the DRC. The proposed Lamu facility would exceed current regional refined-fuel demand, which the report put at about 450,000 barrels per day, potentially allowing surplus output to be sold beyond East Africa.

The location is central to the plan. OilPrice.com said Lamu’s deep natural harbor could receive large crude tankers that cannot call at Mombasa, while also serving as an export point for gasoline, diesel and jet fuel. The report said construction and operations are projected to create more than 60,000 jobs, which would make it a major industrial project for Kenya’s coast.

The proposal still faces major uncertainties. OilPrice.com noted environmental objections linked to Lamu’s UNESCO-listed ecosystem, concerns about emissions and long-term fossil-fuel asset risks, and worries that such a large refinery could dominate regional fuel markets. No final approval, financing close or construction start was established in the supplied report.