Kenya Gains Edge as Dangote Weighs Major Refinery Investment
Nigerian billionaire Aliko Dangote is now giving serious consideration to Kenya’s coastal city of Mombasa as the possible home for his massive oil refinery project – one that could send shockwaves through East Africa’s energy industry.
The proposed refinery, estimated to be worth anywhere up to $17b, would be able to process a staggering 650,000 barrels of oil per day – which would make it one of the biggest, privately-funded energy deals the continent has ever seen.
We first got wind of the development from Reuters, who had picked up on some comments made by the Financial Times.
Why Mombasa Is Emerging as the Preferred Choice
From what we’re hearing, Dangote’s leaning pretty heavily towards Mombasa over Tanzania’s Tanga port because of Kenya’s much more solid fuel infrastructure – and its perfect spot for tapping into regional markets.
Dangote himself put it this way to Reuters: “I’m beginning to think that Mombasa is the better choice, just because Mombasa has a much bigger, and deeper port.”
We can expect Dangote to have a few more chats with William Ruto before he makes his final mind up – but it’s looking like Mombasa is going to be the port in the running.
Industry watchers think that the Port of Mombasa already gives Kenya a real advantage, because it’s such a critical fuel transit hub for all the surrounding countries – like Uganda, Rwanda and South Sudan.
Regional Push for an East African Refinery
The proposal really started to gain traction at the Africa We Build Summit in Nairobi last month, when regional leaders started talking about ways to cut East Africa’s reliance on imported refined fuel.
Early on, people had been talking about building the refinery in Tanzania’s Tanga port – with crude oil coming in from Kenya, Uganda, South Sudan and the Democratic Republic of Congo – but it now seems like things have shifted decisively in Kenya’s favour.
It looks like there’s a bit of a competition brewing between Kenya and Tanzania at the moment – both countries wanting to position themselves as East Africa’s go-to energy and logistics hub.
What the Project Could Mean for East Africa
If – and when – the refinery does finally get built in Mombasa, it’s going to send shockwaves through the region’s fuel supply.
For now, East African countries rely heavily on imported refined fuel from the Middle East and parts of Asia – but a regional refinery would reduce transport costs, make fuel supplies a lot safer and help insulate the region from global supply disruptions.
The project would create thousands of jobs – both directly and indirectly through construction, transport, storage and all sorts of petroleum-related services.
And for Kenya, getting the deal would cement Mombasa’s position as one of Africa’s most important trade and energy trade corridors.
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Kenya Gains Edge as Dangote Weighs Major Refinery Investment
