Kenya Petroleum Refineries KPRL was originally set up by Shell and the British Petroleum Company (BP) to serve the East African region in the supply of a wide variety of oil products. The company was incorporated in 1960, under the name East African Oil Refineries Limited.
The first refinery complex, which has distillation, hydrotreating, catalytic reforming and bitumen production units was commissioned in 1963. The second refinery was commissioned in 1974 and also has distillation, hydro-treating and reforming units. Share holding KPRL is a privately owned limited liability company. The Government owns 50 per cent of the company’s equity and the remaining 50 per cent is held by Essar Energy Overseas Limited.
The refinery processes crude oil, mainly imported from the Gulf region for marketing companies on the basis of processing agreements, which set out the precise terms on which the refinery takes custody of specific quantities and types of crude oil, and how they are processed and delivered.
For this service, the user pays a processing fee, which varies according to the type of crude oil processed.
KPRL’s main products include liqueﬁed petroleum gas (LPG), unleaded premium gasoline, regular petrol, automotive gasoil, industrial diesel, fuel oil and special products like bitumen and grease. KPRL does not own crude oil or its products. It serves all customers, called refinery users, according to the terms of the processing agreements. KPRL offers the following services:
- Crude oil refining
- Laboratory services
- Loading facility
- Emergency Response School
Crude oil is imported by the tender winner in a nominal cargo size of 80,000 tonnes. Ships are berthed at Kipevu oil jetty by the Kenya Ports Authority.
The crude oil is refined to produce oil products by distillation through the refinery units. The process produces volumes of different products as specified by the marketer.
The refinery’s laboratory is recognised in the industry for its exemplary performance in quality assurance.
Any fuel product entering the country must meet certain guidelines and standards specific for use in the country’s market. The KPRL laboratory offers services that certify or verify if a particular oil product or products meets the stipulated standards. A certificate is then issued for the same.
All products produced, except bitumen which has a loading facility inside the refinery, are transferred to the customers via pipelines.
The processing efficiency of an oil refinery can be enhanced if the product mix ratios could be changed to produce a larger proportion of the higher value products (LPG, petrol, kerosene and diesel) and both cheaper and more crude oil intake can be realized.
KPRL plans to achieve this through the construction of a Thermal Gasoil Unit (TGU) that will convert fuel oil into lighter products. The investment includes facilities for reducing sulphuron gas oil and treating emissions to the air and surface water.
KPRL is also developing a project for the construction of a 6,700-tonne LPG storage facility with an import and export line extending to the Kilindini Harbour. The company is in discussions with other potential investors to jointly invest in the LPG project.
It is estimated that the refinery requires about Kshs93 billion ($1.1 billion) to raise its capacity and make it competitive.
KPRL has already hired Standard Chartered PLC to arrange financing for the multi-bi]lion shilling upgrade plan. This investment would see the refinery upgraded to process four million tonnes of crude per year from the 2.6 million tonnes handled currently. The plant, which was last upgraded in 1994 and has not had any substantial investment since, is unable to meet its full production capacity of six million metric tonnes.