Philip Mwakio
23 July 2007
Nairobi — The Kenya Petroleum Refineries Limited (KPRL) has appointed Standard Chartered Bank (SCB) to find strategic investors for the upgrade of its Mombasa refinery.
An engagement letter formalising the appointment of SCB was signed between the two parties last week, KPRL General Manager, Mr John Mruttu said in a statement.
"KPRL looks forward to working closely with SCB on this important assignment," he said.
Upgrading of the refinery will significantly enhance KPRL's profitability, increase processing capacity, reduce Kenya's dependency on imported refined petroleum products and create more jobs in the oil sector.
KPRL provides crude oil processing and product storage services for oil marketers, with a processing capacity of 1.6 million tonnes per annum.
The refinery produces 60 per cent of the country's LPG and approximately 65 per cent of the country's demand for motor gasoline, kerosene and diesel fuel. The balance is imported by oil companies directly.
The plant upgrade will take three years for the design, engineering, procurement and construction, with an anticipated start-up date in 2010.
Cost estimates for the upgrade project was initially put at Sh22 billion. Foster Wheeler is currently updating cost estimates for the upgrade project, while a review of the petroleum products market in East Africa is being undertaken by Purvin & Gertz.
Once the results of these studies have been analysed, the information memorandum package including new information will be released to potential investors.
In May, the Government pledged to contribute Sh3.64 billion towards the upgrade and at the same time maintain its 50 per cent shareholding. Other shareholders - BP, Chevron Texaco and Shell hold the other 50 per cent.
SCB will work with KPRL to find strategic investors for the remainder of the required funding for the upgrade.
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