With a monthly Liquefied Petroleum Gas (LPG) consumption range between 15,000 and 23,750 metric tons, Kenya Pipeline Company (KPC) plans to erect two facilities worth $125 million with the aim to move the nation’s cooking fuel away from charcoal and firewood.
“It will enhance the current inadequate LPG supply, distribution and storage infrastructure, as well as increased utilization of clean energy,” the State corporation’s Managing Director Joe Sang told Bloomberg in an emailed response to questions.
Proposed locations for the facilities designed to handle and store LPG include the capital city of Nairobi and the second-biggest city, Mombasa. The $60 million depot in Nairobi will have the capacity to store 10,000 tons of gas, and equipment to refill cylinders, while Mombasa’s $65 million plant will have the capacity to store 25,000 tons of gas, rail and truck loading, and bottling facilities.
The company, however, plans to double the Mombasa storage capacity once it becomes operational, in order to meet regional demand from landlocked economies which includes Uganda and Rwanda.
According to Sang, the facilities, which will be Kenya’s first publicly owned cooking-gas terminals promises to secure available and stable supplies for the East African region and diversify KPC’s revenue sources. The construction of the facilities will begin in October and it is scheduled to be ready by the end of December 2020.
In a bid to encourage cooking-gas use in the country and make it affordable for its citizens, the Kenyan government removed Value Added Tax (VAT) on cooking gas and subsidized the cost of 6 kilograms (13 pounds) cylinders.
East Africa’s biggest economy wants to increase the usage of gas from current 4 kilograms to 15 kilograms per person by 2030, though most of its population would rather go for the more conservative charcoal, firewood, and kerosene.