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17 February 2015

Kenya: Gas discovery delays import plans

Kenya has pulled the reigns on a liquefied natural gas (LNG) import deal with Qatar after the discovery of 1.8 trillion cubic feet of onshore natural gas in north-east Kenya.

The delayed agreement included the import of 1 million mt of LNG annually to power a 700MW in Mombasa. However, energy cabinet secretary Davis Chirchir told Platts.com in a telephonic interview:

"We have to be careful not to rush. You do not want to commit yourself say for 10 years and find your own gas cannot find a market”.

Africa Oil Corp. made the gas discovery at the Sala-1 well in block 9 in north eastern Kenya and the government intends to capitalise on the finding instead of ploughing money outside of the country.

"The plan is to transform the natural gas [which] Africa Oil and Marathon Oil Corporation discovered, to power in the next nine to 15 months. [This will] add an additional 200-500 MW to the national grid”, Chirchir said.

LNG in Kenya

Kenya’s delayed agreement included the development of a 700MW gas-fired plant at the Dongo Kundu port. The LNG would have been imported from Qatar which would have contributed an additional generation output of 5GW by 2017. This would reduce electricity tariffs to US$0.7 (ZAR8.0) per kWh.

A floating storage re-gasification plant was part of the Dongo Kundu construction process to distribute gas to power generating plants which are currently fired by diesel.

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