Africa’s richest man, Aliko Dangote, has selected Kenya as the site for a planned 700,000-barrel-per-day oil refinery, marking a major win for Nairobi in the race to host East Africa’s largest fuel-processing project.
- •The refinery, to be built in Lamu on Kenya’s coast, could cost as much as KSh 2.2 Trillion (US$17 billion), Bloomberg reported, citing a spokesman for Dangote Industries Ltd.
- •The facility is expected to replicate Dangote’s refinery outside Lagos, Nigeria, one of the largest single-train refineries in the world.
- •Reuters separately reported that Dangote Group plans to finance the Kenya refinery through internal cash flow, bonds and proceeds from an initial public offering.
Edwin Devakumar, Dangote Industries’ vice president for oil and gas, told Reuters that “the site has been selected, soil tests are under way, and design and engineering work has commenced.”
The project would supply refined petroleum products to Kenya and neighbouring East African markets, reducing the region’s dependence on imported fuel. East Africa currently relies heavily on refined petroleum imports, exposing consumers and governments to shipping costs, foreign exchange pressure and global supply shocks.
Dangote’s decision also shifts momentum away from Tanzania, whose port city of Tanga was previously considered as a possible site for the regional refinery. Reuters reported that Kenya was selected on infrastructure, logistics and market considerations, while Bloomberg quoted Dangote as saying Lamu was chosen for “commercial and technical” reasons.
The proposed refinery would be the biggest refining investment by Dangote Group outside Nigeria. It would also place Kenya back in the refining conversation more than a decade after the old Kenya Petroleum Refineries Ltd facility in Mombasa stopped refining crude and was converted into a storage operation.
President William Ruto said in May that Dangote would start construction of the facility in Kenya this year. The latest reports, however, suggest that the project is still in its preparatory phase, with soil testing and engineering work underway.
Timelines differ between the two reports. Reuters said the refinery could take up to three years to build, while Bloomberg reported that construction would take about five years. On that basis, the project remains a long-term infrastructure bet rather than an immediate fuel-market intervention.
Once completed, the refinery would become the second-largest on the continent and deepen Dangote’s role in Africa’s downstream oil market, following the start-up of his Nigerian refinery, which has helped Nigeria reduce dependence on imported fuel.
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