Kenya and Uganda forge ahead with pipeline extension to boost connectivity between borders

Posted on : Monday , 3rd June 2024

Uganda imports an impressive average of 2.5 billion litres of petroleum annually, valued at about $2 billion, with KPC handling at least 90 per cent of the volumes. Kenya is actively engaging with Uganda in a fresh endeavor to sustain and potentially enhance petroleum exports despite the heightened competition from neighboring Tanzania. Recently, Tanzania's interest in expanding transit markets through the Dar es Salaam Port has put pressure on East Africa's economic powerhouse, Kenya.

In a positive turn of events, Tanzania has offered to license Uganda National Oil Company (UNOC) to import petroleum products through Dar es Salaam. This development follows Kenya's successful government-to-government deal with renowned Gulf oil giants. Kenyan-based OMCs, including Galana Oil, Gulf Energy, Oryx Energy, One Petroleum Ltd, and Asharami Synergy, are now empowered to import products for the local market.

Kenya has been actively promoting petroleum exports to Uganda through the Port of Mombasa, utilizing its pipeline to Uganda and Kisumu depots before road transportation into Uganda. Additionally, Kenya's robust infrastructure, particularly the 1,700 kilometre-long Northern Corridor road network, serves not only Uganda but also Rwanda, Burundi, and Eastern DRC.

Tanzania, on the other hand, predominantly serves the region through the 1,300-kilometre-long Central Corridor, fostering export and import activities within the EAC region. These corridors, combining rail, road, and lake transportation networks, facilitate seamless trade operations.

Looking ahead, Kenya is optimistic about continuing to serve the region, with plans to extend its pipeline into Uganda. The Kenya Pipeline Company (KPC), responsible for storage and transportation, boasts a substantial 1,795-kilometre pipeline network, with the capacity to handle about 14 billion litres of petroleum products. With two major facilities in the Western region, the Eldoret depot and Kisumu depot, with storage capacities of 48 million litres and 45 million litres respectively, KPC is well-equipped to meet the growing demands.

Despite the evolving landscape, Uganda remains a crucial export market for Kenya's oil products, with KPC expressing its commitment to sustain and expand this market, benefiting not only Uganda but also the entire region. Kenya aims to foster stronger ties with neighboring countries, including Rwanda, DRC, Burundi, and South Sudan, in its pursuit of regional prosperity and collaboration.