UK-Based Firm Wood Group Wins Bid to Construct Sh200bn Turkana-Lamu Pipeline
Wood Group Plc, a British company that offers energy services, has received a contract from the Kenya government to construct a pipeline to move crude oil from the Turkana fields to the Lamu Port.
Andrew Kamau, the principal secretary at the Ministry of Petroleum and Mining said the UK company emerged the winner of bids made by eight firms to construct the pipeline.
“We selected the eight firms from a pool of contractors that had submitted applications to be prequalified to undertake design work after we sent out a request for expression of interest in 2016,” he stated.
Wood Group is expected to finish the design work for the project which will cost Sh200 billion in eight months.
The design work, which refers to the front-end engineering design, will entail studying the pipeline plan and basic engineering. Additionally, the work will inform technical requirements and the investments required to construct the pipeline.
The construction of the 800-kilometre pipeline will begin once the design work is complete. The pipeline is expected to be complete before commercial oil production begins in 2021.
Tullow Oil, the developer of the Turkana oilfields said last year that they would start the design work prior to the construction of the pipeline. Tullow, together with Maersk Oil and Africa Oil, said it was in the final phase of discussing with the Kenyan government about a joint development agreement that would guide the project. However, the project is yet to begin even after Tullow generated 55,000 barrels of crude oil for export.
Last year, the delayed project pushed the government to contract three local firms to offer trucks and oil tank containers to transport the crude oil to the Mombasa Port by road.
Primefuels Limited got the tender to supply 100 tank containers with a capacity of 150 barrels of crude each while Multiple Hauliers (EA) Limited and Oilfield Movers Limited got the tender to provide the trucks “on which the tank containers would be mounted.”
However, this plan is yet to begin.
Industry experts have criticised the idea of transporting crude by road arguing that to fill one ship tank, at least 20 trucks would be required each day to transport crude oil to Mombasa for two months. However, the pipeline will be able to transport 120,000 barrels of crude per day thereby making it cheaper and faster.