Kenya and Uganda ready to build the Eldoret-Kampala oil pipeline

Kenya and Uganda have started planning for the construction of a petroleum products pipeline between Eldoret and Kampala, a project that was agreed on by Presidents William Ruto and Yoweri Museveni in May this year

Senior officials from the two countries held talks last week, setting the stage for the pipeline that is expected to ensure the supply and security of petroleum products in Uganda. The country largely relies on Kenya's petroleum import system but has had to contend with major shocks in the recent past, which have seen it result in procuring products directly from major petroleum refineries.

Kenya is expected to build a line from Eldoret to Malaba (Kenya-Uganda border), with Uganda putting a link line to Kampala.

“This week, we had our first meeting with Uganda's Minister of Energy and Mineral Development, Mrs Ruth Ssentamu at Kenpipe Plaza. State Department for Petroleum PS Mohammed Liban and Director Mohamed Birik who is hosting the minister accompanied the team from Uganda who are in the country to start off the planning and preparation for the proposed Eldoret- Kampala- Kigali pipeline,” said Joe Sang chief executive KPC.

“The meeting was important for their understanding of Kenya Pipeline operations, infrastructure and human capacity.”

The pipeline will greatly ease the process of Uganda importing petroleum products. 

The country relies on Kenya’s import system but this has been tested as relations between the two neighbours experienced strains. Among the causes of this difficulty has been the Government-to-Government (G-to-G) oil import deal that Kenya entered into with three international oil companies from the Middle East.

Uganda had protested noting that Kenya should have consulted it, due to its landlocked nature and heavy reliance on Kenya in importing all its fuel, in negotiating the deal. The country has traditionally relied on private firms to import fuel to Uganda, which it also noted exposed Ugandans to the high cost of petroleum products.

Uganda would later form its own national oil company with a mandate to secure the supply of petroleum products by sourcing products directly from oil producers or refineries. The Uganda National Oil Company went on to sign a deal with Vitol Bahrain for the supply of petroleum products.

 It however initially had difficulties in importing petroleum products as Kenya declined to issue the Uganda National Oil Company (Unoc) with a licence that it needed to be able to import through Kenya.

To import products through Mombasa port and move the products on the road or the pipeline infrastructure across Kenya and into Uganda, Unoc needed to be licensed by Kenyan authorities. Uganda had considered moving to the East African Court of Justice hoping the court would compel Kenya to allow Unoc import products through the country.

The May meeting between Ruto and Museveni resolved the matter, with a framework that now enables Unoc to import refined petroleum commodities directly from the oil-producing countries and use Kenya’s infrastructure to get products to Uganda.

A pipeline between Eldoret and Kampala would significantly ease the logistical challenges that petroleum firms operating in Uganda had to go through when picking fuel from Eldoret and Kisumu by road.

Other than the high cost of moving products using trucks, road transport also contributes to increased road infrastructure wear and tear.

Road transporters are likely to suffer reduced business once the pipeline is in operation and many will have to strategize.

Pipeline transport could also mean a significant reduction in business for Kisumu Oil Jetty (KOJ) and a similar jetty and depot in Jinja, Uganda. The two jetties have facilitated the transportation of petroleum products on Lake Victoria, loading petroleum products going to Uganda and beyond in Kisumu and offloading at Jinja. 

One of the vessels that has been frequenting the KPC-owned KOJ, picking products twice a week, can carry 4.5 million litres of fuel at a go. This has translated to displacing 150 trucks each carrying 30,000 litres of fuel from the road. A pipeline would however deliver much more fuel and at a much faster speed.

The Mombasa-Nairobi pipeline, for instance, currently transports about a million litres per hour but can increase this to 1.8 million litres per hour. Following its operationalisation, the Energy and Petroleum Regulatory Authority (Epra) determined that it could transport all petroleum products up to Nairobi and stopped compensating oil marketing firms using road transport to move products between Mombasa and Nairobi.

The Eldoret-Kampala pipeline will add to the challenges that the Kisumu Oil Jetty has faced. The jetty was dubbed a game changer in the transportation of petroleum products in the region at its commissioning.

It was expected that refined petroleum products would be moved through the pipeline between Mombasa and Kisumu and thereafter, oil marketing companies with operations in Uganda, Rwanda, and the Democratic Republic of Congo and further to lift their products in Uganda with ease and cost-effectively.

It however experienced delays in being operationalised following its completion.

This was due to delays that faced a similar facility on the Ugandan side that would enable products loaded in Kisumu to be offloaded in Jinja. The jetty was completed in 2018 but began being fully used in late 2022.