Kenya signs agreement with Tullow-led consortium for $2.1 billion oil pipeline

Kenya has announced it has signed an agreement with a consortium of three firms led by Tullow Oil, which could usher in the construction of a US$2.1 billion oil pipeline by 2021.

The proposed 820km pipeline will transport crude oil from the Lokichar Basin in Northwest Kenya to a seaport near Lamu on the East African nation’s Indian Ocean coast.

Kenya’s Energy and Petroleum Ministry said the consortium, which comprises of Tullow, Africa Oil and A.P. Moller-Maersk, will produce a feasibility study for the pipeline, which will include a Front End Engineering Design (FEED).

Tullow and Africa Oil were the first to discover the Lokichar Basin in 2012 under a joint venture exploration pact, before the former sold part of its stkae to A.P. Moller-Maersk.

There is estimated to be around 750 million barrels of recoverable resources within the basin.

Tullow’s chief executive Paul McDade said survey work on the pipeline is already being carried out with a final investment decision expected to be made in 2019, before the project is completed in the first quarter of 2021.

The chief also added that Tullow is working with renowned conservationist and paleoanthropologist Richard Leakey, in order to ensure the project doesn’t interfere with any existing archeological sites and hotspots.