Kenyan President William Ruto has arrived at the Dangote Petroleum Refinery in Lekki, Lagos, ahead of the groundbreaking of the planned 700,000-barrel-per-day refinery in Lamu, Kenya.
Ruto’s visit to the Lagos facility on Friday is his first trip to Nigeria since becoming Kenyan President and comes five days before he and Dangote Group President, Aliko Dangote, are expected to break ground for the multibillion-dollar Lamu refinery on September 30.
The Dangote Group confirmed that Dangote would receive Ruto at the refinery, which is currently operating at a capacity of about 700,000 barrels per day, with plans to expand it to 1.4 million barrels per day.
Ruto’s visit is expected to give the Kenyan leader a first-hand look at the refining operation that Dangote plans to replicate on a larger regional scale in East Africa.
The proposed Lamu refinery, estimated at KSh2.2 trillion, or about $17bn, is designed to process 700,000 barrels of crude oil daily and increase Kenya’s domestic refining capacity while reducing its dependence on imported petroleum products.
Ruto announced on September 21 that Kenya was ready to begin the project after meeting Dangote and the Chief Executive Officer of the Africa Finance Corporation, Samaila Zubairu, on the sidelines of the 81st United Nations General Assembly in New York.
The discussions focused on financing arrangements and final preparations for the commencement of construction.
The Kenyan government expects the project to strengthen the country’s energy security, increase local value addition, create more than 500,000 jobs and open up wider economic opportunities through stronger regional supply chains.
The Lamu facility is also expected to support Kenya’s industrialisation plans and serve petroleum markets in East and Central Africa.
Preparatory work for the project has advanced with the award of a contract worth more than $448m, or over KSh58bn, to Engineers India Limited, an Indian state-owned engineering company.
The contract covers project management, engineering, procurement and construction management for the refinery and petrochemical complex. Engineers India previously worked with Dangote Group on the development of the Lagos refinery.
The Lamu project has evolved from earlier discussions about establishing a regional refinery at Tanzania’s Tanga port to process crude from Kenya, Uganda, South Sudan and the Democratic Republic of Congo.
Dangote subsequently expressed interest in bringing the refining model used in Nigeria to East Africa. The project was later considered for Mombasa before Lamu was selected because of its access to the Indian Ocean and the Lamu Port-South Sudan-Ethiopia Transport corridor, known as LAPSSET.
The project also represents a revival of Kenya’s efforts to establish a major domestic refining industry more than a decade after the Mombasa refinery stopped processing crude in 2013.
The old refinery experienced financial difficulties, while attempts to secure funding for a major upgrade failed. Kenya later took full ownership of the facility after acquiring Essar Energy’s 50 per cent stake in 2016.
Ruto’s current visit to Nigeria has a familiar Dangote connection. His previous visit to the country about 12 years ago was to the Dangote Cement factory in Kogi State.
The latest visit, however, comes as Dangote expands his refining interests beyond Nigeria and seeks to establish a major refining hub in East Africa.
With the planned Lamu facility and the proposed expansion of the Lekki refinery from 700,000 barrels per day to 1.4 million barrels per day, Dangote’s planned refining capacity across the two projects would rise to about 2.1 million barrels per day.
The Nigerian refinery has continued to produce refined petroleum products for the domestic market while also supplying international markets, making its operations a key reference point as Kenya prepares to embark on its own large-scale refining project.
The September 30 groundbreaking in Lamu is expected to formally move the Kenyan project from planning and financing preparations into construction.
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