Oil & Gas

31 Aug 2023

Kenya Pipeline Completes Takeover of Changamwe-Based Kenya Petroleum Refineries Limited Facility

31 Aug 2023  by allafrica   
The government has concluded the transfer of the Kenya Petroleum Refineries Limited (KPRL) to Kenya Pipeline Company (KPC), Energy and Petroleum Cabinet Secretary Davis Chirchir has announced.

Chirchir said the takeover will help improve the utilization of the assets of KPRL, which closed down its Changamwe refinery in 2014 after it became uneconomical to run the operations at the facility.

The Energy CS who spoke in Mombasa on Wednesday explained the KPRL facility became unprofitable after it failed to match the required output.

KPRL assets, which sit on a 370-acre parcel of land have been idle for the past nine years, and on July 18, President William Ruto's Cabinet approved the acquisition of KPRL by KPC through transfer of shares.

"Acquisition by transfer of shares basically is like saying one fully owned government parastatal takes ownership of another parastatal because they do the same business," said Chirchir.

Sh150bn balance sheet

Speaking after a meeting with Mombasa Governor Abdulswamad Nassir, KPRL management and a section of the county's political leadership, the Energy CS said Kenya Pipeline comes with a strong balance sheet of over Sh150 billion.

"And with a strong company coming in to take KPRL, we can be able to see once again activities of recreating the economy in Mombasa and creating employment," said Chirchir.

He said they will be working with the county government of Mombasa to revamp KPRL assets in order to work for the people of Mombasa County.

"We want KPRL to work for the people of this country, to work for the region because we are internationally situated to be able to serve Uganda, serve Rwanda, and even play a competitive advantage against our neighbours in Tanzania," he said.

Chirchir assured that no employee will lose their job with the takeover.

"Nobody is losing jobs. We had PwC doing a study to confirm which was the best acquisition option, and we've zeroed in on the acquisition by transfer of shares as opposed to transfer of business," he said.

"We'll be talking to the staff of KPRL to assure them that they are in safer hands."

He said however KPRL employees had already started working with KPC through a lease agreement where KPC has been using the tank at KRPL for the storage of petroleum.

No job losses

"They have rehabilitated most of those tanks and they are being used today by KPC. Why do we need KPC to leverage the asset of KPRL? The leadership today would like to accelerate the use of LPG gas, as a transitional fuel to mitigate the challenges of climate change," he said.

He said Kenya will be hosting the Africa Climate Change Summit next week whereby more than 30 presidents and heads of state will be coming into the country.

"Some of the quick wins for us would be really to look at how do we accelerate the pushing of LPG to the economy and reduce the use of fuel, wood fuel, or what you call biomass," he said.

Governor Nassir said one of the issues that has been raised is whether there will be job losses if KPC takes over the assets of KPRL.

"Issues that were being raised is whether the people who are currently employed by KPRL will be affected in any way, and the CS has been able to confirm that not only will they not be affected, but as a matter of fact there will be more employment opportunities," said Nassir.

He said as leaders they also want the locals to benefit when the new master plan for KPRL is unveiled.

"When the master plan is ready, we want the people of Mombasa to be able to benefit from more job opportunities. Equally, the people of Mombasa to be able to benefit from the CSRs," he said.

Others present during the meeting were KPC managing director Joe Sang, KPRL acting CEO Joseph Ndoti and a section of Mombasa MCAs.


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