Kenya evaluates FDP for US $3.4bn Lokichar oil project

The government of Kenya is in the process of evaluating the final field development plan (FDP) for Tullow Oil’s US $3.4bn Lokichar oil project.

The final field development plan was submitted in December and includes details of the project. The oil pipeline is part of a larger project to develop and export oil from oilfields in Kenya’s South Lokichar Basin.

The pipeline would originate in the South Lokichar Basin, near the town of Lokichar, Turkana County, in northwest Kenya, and would end at a new port to be constructed at Lamu, Lamu County, on the Indian Ocean.

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Pipeline route

The pipeline will pass through Lamu, Meru, Isiolo, Garissa, Samburu and Turkana counties. Already two designs for the project were presented by British firm Wood Group Plc., They have a price variation of US $122.2m. The East African country can opt for a pipeline with onshore storage facilities that would cost US $1.2bn to build or one with floating storage facilities at a cost of US $1.1bn.

In both cases, the proposals indicate that the construction of the onshore pipeline will cost US $568.2m, pump stations US $164.4m with the difference mainly being in the marine terminal that will cost US $145.9m for onshore and US $45m for floating storage. The pipeline would carry up to 120,000 barrels of crude oil per day upon completion.

Originally Kenya partnered with Uganda to export Kenya oil through a joint pipeline to Port Lamu on the Indian Ocean coast. When those plans fell through, Kenya announced it would build its own pipeline from Lokichar to Lamu. In 2016, the British oil conglomerate, Tullow Oil Plc signed an agreement with the Government of Kenya for the pipeline project. The joint venture would involve African Oil Limited and Maersk Oil, two other companies with oil exploration rights in northwestern Kenya.