7 February 2018

Kenya: Cayman Islands Firm to Build Lamu Gas Plant

Cayman Islands-registered oil firm Midway Resources International (MRI) is set to set up a gas-fired power plant in Lamu building on the county's rising profile as an emerging electricity production hub.

MRI says in a regulatory filing that its local subsidiary, Zarara Oil & Gas, has appointed a consortium of American and Kenyan consultants to conduct a feasibility study to evaluate the project's technical, financial and environmental aspects.

The study, which comes after Zarara received a $1 million (Sh101 million) grant from the US Trade and Development Agency as part of the USA Power Africa Initiative, is expected to be completed by September 30.

"The objective of the feasibility study is to evaluate the technical, financial, environmental and other critical aspects of developing a natural gas-fired power plant in Lamu County," the multinational said in a statement.

The project, which is anticipated to produce between 50 and 200 MW of electricity in the first phase, could be scaled up to 1,200 MW if more gas resources are discovered, MRI said.

Amu Power, a consortium comprising Centum Investment Company, also plans to build a coal-powered 1,050 MW plant in Lamu.

Onshore gas blocks

Zarara owns a 75 per cent interest in two onshore natural gas blocks (L4 and L13) in Lamu, with the Kenyan government holding the remaining 10 per cent.

The company also owns a series of fields, called Pate, with proven gas resources and which will power the proposed electricity plant. Zarara's team of consultants is led by American firm Nexant Inc which has responsibility for overall delivery of the feasibility study.

Nexant will lead on electricity transmission and interconnection both in the initial phase and consideration of longer term development and risk assessments.

Others are Bechtel Corporation (USA) which will provide technical configuration for the power plant, and Synergy Consulting (USA) which is responsible for provision of financial services.

Environmental Resources Management (Kenya) will be responsible for environmental and social impact advice, while Muhoro & Gitonga Advocates (Kenya) will provide legal services.

Kenya

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