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Lebanese firm wins $490m Kenya oil pipeline deal

Nairobi, July 2, 2014

Kenya has awarded a 43 billion shilling ($490.31 million) contract to build a fuel pipeline linking Mombasa and Nairobi to Lebanese construction firm Zakhem International, the state-run Kenya Pipeline Company (KPC) said.

KPC has said previously that the existing pipeline linking the two cities, also built by Zakhem International in 1973, has outlived its 30-year lifespan and was prone to ruptures.

Many of Kenya's refined fuel imports, as well as imports in transit on the way to neighbouring countries and products from east Africa's only refinery in Mombasa, have to be transported by truck, which is slow and unreliable owing to breakdowns and poor roads.

"Construction of the 20-inch multi-product oil pipeline from Mombasa to Nairobi is set to begin in earnest with the signing of the contract between the Kenya Pipeline Company and the contractor Zakhem International," Charles Tanui, managing director of KPC, said in a statement late on Tuesday.

Zakhem International will also be required to build a fibre optic cable along the route, install four pumping stations for the pipeline and upgrade existing KPC firefighting equipment in Nairobi.

KPC said construction was expected to take 18 months.

Early this year it said the project would be financed through internally generated company funds and external borrowing would be limited to between $400 million and $500 million.

Family-owned Zakhem International has also carried out oil pipeline, refinery and fuel storage projects in Libya, Iraq, Nigeria, Qatar, Italy and Tanzania, according to its website.-Reuters

Tags: Kenya | Lebanese | oil pipeline |

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