State pushes for shared cooking gas facilities to cut costs, boost access

The Ministry of Energy and Petroleum is pushing for the conversion of privately owned cooking gas handling facilities into common user infrastructure as part of its broader strategy to drive up Liquefied Petroleum Gas (LPG) usage in the country.

The initiative, which will be regulated by the Energy and Petroleum Regulatory Authority (Epra), aims to open up existing LPG storage and import facilities to multiple industry players.

This move would allow any licensed importer to discharge cooking gas into shared storage terminals before it is distributed to the market.

The Ministry said it is looking to convert some of the already existing LPG plants into common user facilities.

This would mean any industry player can import LPG and discharge into the storage facilities before the product is moved to the market.

The opening up of private facilities to other private sector players will be regulated by the Energy and Petroleum Regulatory Authority (Epra), which will also set the tariffs that other companies will pay the owner of the LPG plant.

Principal Secretary for Petroleum Mohammed Liban said establishing common user facilities would advance the government’s LPG growth strategy in which it plans to increase per capita consumption to 15 kilogrammes (kgs) by 2030, which will be more than double the current per capita consumption at about seven kgs.

“Once we have common user facilities in place, we will be able to significantly reduce the price of gas, making it more accessible and affordable for Kenyans. This is part of our larger vision for a regional procurement and distribution strategy that will ultimately reach every household,” Liban said.

The PS said the strategy would also reduce the cost of gas and increase accessibility for Kenyans and the wider East African region.

Liban said the Ministry is in talks with key stakeholders including Africa Gas and Oil (AGOL), which has the largest LPG handling facility in the country, and the Kenya Petroleum Refineries Ltd (KPRL), which is in plans to build storage a storage facility, to streamline LPG infrastructure through shared facilities that will benefit both public and private sector players. 

KPRL, which is owned by the Kenya Pipeline Company (KPC), recently said it plans to lease land to Asharami Synergy that will develop a 30,000 tonne cooking gas facility. This will be a common user facility.

The push for common user facilities, regional LPG depots, and increased private investment is part of the government’s broader LPG growth strategy. 

“By building infrastructure and encouraging competition, we will lower prices and increase supply. This is how we secure clean energy for all Kenyans while protecting our forests and environment,” the PS said.

The Cabinet in December approved the procurement of LPG through a “centrally coordinated bulk procurement system”.

These include importation of cooking gas through the Open Tender System (OTS), which oil firms used to import petroleum products through. It was replaced by the Government-to-Government system that is currently being used in the importation of fuel.

The government in the past said it could not import cooking gas through OTS or such bulk procurement owing to lack of adequate facilities as well as common user facilities.

Epra has in the past said it had written to private LPG facilities with the intention of converting them into common user facilities. They will charge users a fee that will be regulated by Epra.

“We have told the owners of these facilities that they will become common user facilities. They will then have a common user tariff approved by Epra,” Director of Petroleum at Epra Edward Kinyua told a recent industry gathering.

“The facility owners will then have common user agreements with the player, and then the facilities will be open access.” 

Having in place common user facilities and the cabinet approval of the importation of LPG through bulk procurement process such as OTS could be setting the stage for the government to start regulating prices of cooking gas in the country.

Other than the AGOL facility, the other facility is a Shimanzi Oil Terminal, which is, however, limited due to its size. Other facilities have been under development but are yet to be commissioned. These include the 30,000 tonne plant being put up by Tanzania’s Taifa Gas and another one with a capacity of 22,000, also by a Tanzanian firm, Lake Gas. 

Liban spoke when Ministry officials toured Lake Gas’ onshore and offshore facilities to assess their readiness ahead of the facility’s commissioning. The inspection revealed significant progress at the facility, which currently boasts a 10,000-tonne capacity made up of four storage spheres—each with a 2,500-tonne capacity. 

In the LPG growth, the government is also looking to put up cooking gas infrastructure across different institutions, including 11,000 schools. At the coast last week, Liban also toured 20 pioneering schools including Bahari Girls and Shimo La Tewa National Schools in Mombasa.

According to Bahari Girls’ Principal Sylvano Hamaro, the introduction of LPG has significantly improved efficiency in the kitchen.

She stated that they previously spent a lot of money on firewood and charcoal, not to mention the health risks for their staff due to prolonged exposure to smoke. Now, she noted they are saving time and improving the overall kitchen environment.

Shimo La Tewa principal Mathew Mutiso stated that it takes the cooks a shorter time to prepare meals while emphasizing that they no longer deal with smoke-filled kitchens or soot-covered walls.

“The food is cleaner, the cooking process is safer, and the working conditions have greatly improved,” said Mutiso.