Infrastructure

Tullow to Start Work on 825km Turkana-Lamu Oil Pipeline

The project is expected to cost Sh210 billion.

Updated on

April 4, 2017

Tullow Kenya — Tullow is rushing to meet Kenya’s target of commercialising oil by 2017. PHOTO | FILE

UK oil giant Tullow is set to begin work on the proposed crude oil export pipeline from Turkana to Lamu as Kenya prepares to go into commercial production of oil in 2020.

Tullow said it would begin design work in June before construction of the 825km pipeline begins next year, pushing forward a project that is estimated to cost Sh210 billion.

The design work, technically known as the Front End Engineering Design (FEED) program, involves studying the pipeline route and conducting basic engineering to determine technical requirements and the investments necessary for pipeline installation.

“Preparations for the upstream development FEED are underway, with FEED expected to commence in the second half of 2017,” Tullow said last month while announcing its financials for the year to December 2016.

Tullow reported a loss of Sh61.3 billion, which was a 42 per cent improvement compared to a Sh103 billion loss a year earlier.

The company, which has teamed up with Africa Oil and Maersk Oil, said it was in the final stages of talks with the Kenyan government on a joint development agreement that is expected to give clear directions on the project.

“The joint venture (JV) partners and the Government of Kenya are also in the final stages of negotiation for a Joint Development Agreement (JDA), which sets out a structure for the Government of Kenya and the JV partners to progress the development of the export pipeline,” the company said in a statement.

“This agreement will ultimately enable important studies to commence such as pipeline FEED, Environmental Social Impact Assessment, as well as studies on pipeline financing and ownership.”

Tullow said it was in the final stages of the implementation of the Early Oil Pilot Scheme (EOPS), under which it will produce 2,000 barrels of oil per day for about two years to set stage for full field development.

“The EOPS will use existing upstream wells and oil storage tanks to initially produce approximately 2,000 (barrels of oil per day) gross in 2017. The EOPS will provide important information which will assist in full field development planning,” Tullow said.