Inadequate infrastructure has been blamed for the slow pace of commercialization of crude oil in Kenya as the country seeks about $5 billion (Sh500 billion) to develop and expand fuel facilities.
One state parastatal however is now banking on its vast infrastructure countrywide to foster the future of energy.
Kenya Pipeline Company (KPC) is the country’s prime institution charged with the mandate to enhance, operate and maintain pipeline infrastructure in Kenya.
Now, the oil distribution company seeks to grow in scale as it leverages its comparative advantage in the oil and gas niche.
KPC operates 5 storage and distribution depots for imported refined petroleum products, located in Eldoret, Kisumu, Nakuru, Nairobi and Mombasa and which feed from the Kipevu Oil Storage Facility (KOSF) in Mombasa.
The company is mandated to transport petroleum products from Mombasa to the hinterland, and through this mandate generates revenue for the Government of Kenya through dividends and taxes.
Unlike some State corporations, KPC does not depend on government subsidies, but is a self-funded commercial enterprise.
Oil mishandling and pollution can have devastating effects on the environment, and in cases of spillage, it can spread over any surface in a thin film thereby suffocating living organisms beneath.
KPC, however, has been at the forefront of maintaining international standards and quality of oil, mitigating oil-related incidents and setting rules and regulations that govern transportation and usage of petroleum products in the country since its inception in 1978.
As part of its expanding role in the oil and gas subsector, KPC leased Kenya Petroleum Refineries Limited (KPRL) in 2017 and has continue to develop the facility to receive trucked crude oil from the Lokichar Basin which culminated in the first ever crude oil export from East Africa.
The company’s growing investments in KPRL include rehabilitation of crude oil tanks, receipt and discharge pipelines and the connection to the new oil jetty at Kipevu Oil Terminal (KOT). This will culminate in the full acquisition of the facility slated for the current fiscal year 2020/21.
KPC has state-of-the-art product testing laboratories meant for testing all petroleum products before they are admitted into its system.
This ensures all such products meet the applicable international quality standards which translates into safe handling and use by consumers.
The company transports products through pipelines built to international standards; a safe mode of transportation aimed at limiting product exposure to the surroundings.
While within the depots, products are handled in storage facilities fitted with advanced fire detection and protection systems to ensure their safety.
In addition, customer trucks that lift products from KPC depots are subjected to thorough safety inspections as a means of ensuring they are safe to handle such highly flammable products.
Those found not to conform to standards are prevented from accessing depots because they would not only be unsafe to handle petroleum products, but also pose a danger to the depots KPC operates and owns.
TRANSPORTATION AND LOGISTICS
In a bid to ensure that KPC alongside other key government parastatals runs smoothly, His Excellency President Uhuru Kenyatta issued Executive Order No. 5 of 2020 on 7th August, 2020 establishing a framework for the management, coordination and integration of port, railway and pipeline services under the Kenya Transport and Logistics Network (KTLN).
The network brings together Kenya Ports Authority (KPA), Kenya Railways Corporation (KRC) and Kenya Pipeline Company Limited (KPC) under the co-ordination of the Industrial and Commercial Development Corporation (ICDC).
This joint agreement will establish a unified and coordinated national transport and logistics network whose aim is to lower the cost of doing business through the provision of port, rail and pipeline services in a cost-effective manner within acceptable shared benchmark standards.
The collaboration is expected to go a long way in bolstering the business relationship that has existed between KPA, KPC and KRC over decades.
KPC’s funding collaboration has also enabled the Kenya Railways Corporation, the Kenya Defence Forces and the National Youth Service rehabilitate the Nairobi-Nanyuki Railway, which is going to be transformative for the Mt Kenya and Northern Kenya regions.
In effect, the extra revenue generated by Kenya Pipeline has been used to partly fund the President’s Big 4 Agenda being: food security, affordable housing, manufacturing and affordable healthcare for all.
KPC, through special dividends remitted to the Exchequer, has contributed Sh1.8 billion for the Nairobi-Nanyuki railway refurbishment; Sh2.7 billion for the Nakuru-Kisumu railway line rehabilitation and Sh400 million for the Port of Kisumu upgrade.
It further remitted an extra Sh11.2 billion to the Government in the 2019/20 financial year. All this revenue contributes to stimulation of Kenya’s economic recovery and growth.
As the effects of Covid-19 ravaged the country, KPC rolled out a free sanitizer campaign. “Amidst the hard-economic times, we unburdened the poor and vulnerable members of our society from buying sanitizers.
The trust between us, the Oil Marketing Companies and other like-minded stakeholders ensured that we successfully rolled out the campaign.
We produced over 1.6 million litres of sanitizer which was distributed to the most vulnerable groups in all 47 counties,” said Dr. Irungu.
In addition, KPC donated Sh55 million to the National Youth Service to produce masks which went a long way in assisting the less fortunate access masks.
Over 1.5 million masks were produced and distributed to the most vulnerable groups in the society across the 47 counties in Kenya.
To keep up with the developments and rate of growth in the sector, KPC has embraced modern technologies and trends to ensure work is quicker, more efficient and secure.
According to Dr. Irungu, the Corporation has capitalized vastly on a modern 96 core fiber optic cable that is about 1,000 KMs long across the cable plant.
“This network cable runs along the company’s pipeline network from the port city of Mombasa to Nakuru where it branches off to both Eldoret and Kisumu.
We are licensed by the Communications Authority of Kenya to lease the fiber resource to telecommunications providers who in turn use it to carry data traffic through a Tier 2 Network Infrastructure License.
Our partners in the data carrier space include Safaricom PLC, Jamii Telecom, & Wananchi Telecom,” he mentioned.
The cable design is so flexible that it enables these telecommunication service providers to serve their clients in townships along the Mombasa-Nairobi-Nakuru-Eldoret & Kisumu commercial corridor and the surrounding areas comfortably without experiencing lagging and downtime.
Despite stiff competition in high speed internet provision in the region, KPC’s fiber cable offering remains the most sort after and secure over the competition’s due to its enhanced protection against damage or fiber cuts.
This is also coupled with the fact that it runs underground next to the oil pipeline thus making it highly available and extremely reliable for internet and other data services at 99% availability.
MORENDAT INSTITUTE OF OIL AND GAS
Morendat Institute of Oil & Gas (MIOG), is a Centre of Excellence established through an EAC Heads of State Summit resolution to offer capacity building in oil pipeline management, operations and maintenance in the Great Lakes Region.
The institute embraces the competency-based education and training model which calls for 70% practical, and 30% theory training.
This methodology which embodies theoretical and skills-based training, offers programs which can be accessed both online and offline; thus it prepares and assesses trainees through real life, hands-on training.
Programs are embedded in two standard classrooms with more than 80 specialized training programs which can be accessed by between 24 to 30 students simultaneously.
The 80 programs contain 4,800 lessons and about 1,000 interactive experiments.
The COVID-19 pandemic negatively impacted the smooth running of MIOG’s training schedule due to the need for social distancing.
The new normal occasioned by the coronavirus reality has compelled the Institute to embrace an online competency-based curriculum, despite other learning institutions having closed their educational facilities for almost a year.
The most affected courses were technical ones which cannot be considered complete without the trainees’ undergoing the actual hands-on training experience.
To ameliorate these effects, the Institute made use of its Smart Classroom technology which was introduced in 2019 and established in line with KPC’s Vision 2025 which aims at setting up an oil and gas investments hub in the region, thus entrenching Kenya as the gateway to East & Central Africa.
Among the online courses successfully conducted during the pandemic were: Workplace Safety, Health and Environment, Fundamentals of Oil and Gas Operations, permit to Work (PTW) Systems, and Domestic Safety.
MIOG is accredited by Technical, Vocational and Education Authority (TVETA) and complies with the Kenyan TVET Act, Curriculum Development Assessment and Certification Council (CDACC), and the National Qualification Authority (NQA) rules and regulations.
CORPORATE SOCIAL INVESTMENT
KPC has established strong Corporate Social Investment (CSI) programs where its collaborates closely with all the communities in Kenya, and especially those neighbouring our installations which include depots, pump stations and other facilities along our easement which stretches from Mombasa, traversing 14 Counties to Kisumu and Eldoret.
These CSI programs include a scholarship program famously known as “Inuka”, meant to benefit the needy and People Living with Disability (PWDs).
The twofold program; Inuka Social Empowerment Program, is aimed at enabling PWDs – access skills-based training and other economic opportunities; and the Inuka Scholarship Program enables PWDs access secondary level education.
Since its inception in 2016, the Company has consistently sponsored beneficiaries in all the 47 counties through the Inuka Scholarship Program, educating one child per county.
“Through the company’s CSR, we have been able to offer scholarship to children living with disabilities to access secondary school education.
I can happily confirm that we have enrolled a total of 188 girls and 188 boys under the special program,” said Dr Irungu.
Those who will successfully complete their secondary school education will continue to enjoy the company’s support until they achieve their aspirations in their chosen fields.
Through the scholarship program, KPC has spent approximately Sh52 million, translating to Sh14 million every year.
In addition, the Company has built a girls’ dormitory at Karare Secondary School in Marsabit County to retain girls in school where they are encouraged and mentored to take up science courses as well as motivate them to value education.
Considering that the locality in the past has considered girl-child education a waste of time and resources, this is a great feat.
Educational sponsorship is just one of many programs the company is supporting through its Foundation.
Such programs are aligned with focused areas as detailed in its CSI policy. These programs cover different sectors such as: education, health & environment, water and sanitation, sports for development and support for special groups, among others.
Other successful CSI projects include: Kochodin High School in Turkana County where KPC donated Kshs 10 Million towards the construction of a dormitory, two classrooms and two pit latrines.
This is in realization of an earlier promise by His Excellency, President Uhuru Kenyatta, to the people of Ngamia 1 in Turkana County.
At the cost of Sh5 Million, KPC also constructed a modern science laboratory at Lokitaung Girls High School in Turkana South.
This in line with the company’s policy to empower girls in science related subjects. Other key projects backed by the Company include the construction of four classrooms at Uswet Primary School the construction of a modern Library at Hema Secondary School in Kisii County, sponsorship of medical camps across the country as well as sponsoring various sports disciplines and clubs.