Kenya on Tuesday signed an agreement with Tullow Oil for a feasibility study on a proposed pipeline to transport crude oil from the country’s oilfields to a seaport on the Indian Ocean coast.
The deal draws the legal and technical roadmap for the project’s early works such as mapping out the route for the pipeline and environmental assessment for compliance.
The country discovered commercial oil reserves in its Lokichar basin in the country’s northwest in 2012.
Recoverable reserves are estimated at 750 million barrels and considered feasible for production at a price of $55 a barrel, which is around current levels.
Charles Keter, cabinet secretary for the Energy and Petroleum Ministry, said Kenya was committed to developing “a modern midstream infrastructure” to help export the country’s crude to international markets.
“This joint development study agreement provides the framework for the pipeline development,”
He said the framework has given the ministry leeway to start inviting investor bids from next week to prepare the pipeline’s design, dubbed front end engineering design (FEED), and carry out an environmental social impact assessment (ESIA) study.
The line is expected to be completed in 2021 at a cost of Sh210 billion, making it the second most expensive infrastructure project after the Mombasa-Nairobi standard gauge railway.