Established on 6th September 1973, the Kenya Pipeline Company (KPC) is the country’s prime state corporation charged with the mandate of enhancing, operating and maintaining pipeline infrastructure in Kenya. KPC’s core mandate is to provide efficient, reliable, safe and cost effective means of conveying petroleum products from the port of Mombasa to the hinterland. KPC aims to transform lives through safe and efficient delivery of quality oil and gas from source to customer as Corporate Watch Magazine Team narrates on the future of the oil distributor as it seeks to be Africa’s Premier oil and gas company.
The Kenya Pipeline Company is seeking about $5 billion (Sh 500 billion) to develop and expand fuel facilities in the country with a view of commercializing crude oil in the near future in Kenya.
Over the years, derisory infrastructure has been blamed for the slow pace of commercialization of crude oil, however the state corporation is now banking on its vast infrastructure countrywide to bet on the future of energy.
Unlike other state corporations, KPC does not depend on government subsidies, but is a major source of revenue to the government in terms of dividends and taxes.
The Kenya Pipeline Company currently boasts of 5 storage and distribution depots for refined petroleum products, located in Eldoret, Kisumu, Mombasa, Nairobi and Nakuru, which are fed by domestic-manufactured product from the Kenya Petroleum Refinery near Nairobi and imported, refined petroleum product from the Kipevu Oil Storage Facility near Mombasa.
The company also operates two aviation fuel depots at Jomo Kenyatta Airport, Nairobi, and Moi International Airport, Mombasa. The company is mandated to transport petroleum products from the Kipevu Oil Terminal via Nairobi to the hinterland, a major source of revenue supporting treasury strategies in Kenya.
Oil is the lifeblood of industrialized nations and has been the world’s most important source of energy since the mid-1950s. Its products are the mainstay of modern society, supplying energy to power industry, heating homes and providing fuel for vehicles and aeroplanes to carry goods and people all over the world. The industry also supports millions of jobs across global economies.
Oil mishandling and pollution can have devastating effects on the environment, in cases of spillage, it can spread over any surface in a thin layer thereby denying any living things beneath it air to breathe. KPC, however has been in the fore front in maintaining the standards and quality of oil, mitigating oil accidents and setting rules and regulations that govern transportation and usage of oil in the country.
Originally, KPC operations focused on the transportation of refined petroleum products before expansion of its niche to the Crude Oil storage and transport business; thanks to the discovery of oil in Kenya. To ensure that continuity, KPC leased Kenya Petroleum Refineries Limited (KPRL) and developed the facility to receive trucked crude oil from the Lokichar Basin which culminated in the first ever crude oil export from East Africa.
The company’s investment in KPRL includes rehabilitation of crude oil tanks, the discharge line and the jetty at Kipevu Oil Terminal (KOT).
Quality, Safety and Logistics…
The Kenya Pipeline Company has set up state-of-the art product testing laboratories meant for analysis of all petroleum products before they are admitted into its system. This ensures all such products meet the applicable international quality standards which translates into safe handling and use by consumers.
The company transports products through pipelines built to international standards; a safe mode of transportation aimed at limiting product exposure to the surroundings. While within the depots, products are handled in storage facilities fitted with advanced fire detection and protection systems to ensure safety.
In addition, customer trucks that lift products from KPC depots are subjected to thorough safety inspections as a means of ensuring they are safe to handle such highly flammable products. Those found unsafe are prevented from accessing depots because they would not only be unsafe to handle products but pose a danger to the depots as well.
on 7th August, 2020 President Uhuru Kenyatta issued Executive Order No. 5 of 2020 establishing a framework for the management, coordination and integration of port, railway and pipeline services under the Kenya Transport and Logistics Network (KTLN). The network brings together Kenya Ports Authority (KPA), Kenya Railways Corporation (KRC) and Kenya Pipeline Company Limited (KPC) under the co-ordination of the Industrial and Commercial Development Corporation (ICDC).
This joint agreement will establish a unified and coordinated national transport and logistics network whose aim is to lower the cost of doing business through the provision of port, rail and pipeline services in a cost-effective manner within acceptable shared benchmark standards.
The collaboration is expected to go a long way into bolstering the business relationship that has existed between KPA, KPC and KRC over decades.
KPC has also since partnered with Kenya Railways, the Kenya Defence Forces and the National Youth Service to bring back into operation the Nairobi-Nanyuki Railway, which is going to be transformative for the Mt Kenya and Northern Kenya regions.
In effect, the extra revenue generated by Kenya Pipeline has been used to partly fund the President’s Big 4 Agenda being food security, affordable housing, manufacturing and affordable healthcare for all.
In this regard, KPC used Sh1.8 billion to refurbish the Nairobi-Nanyuki railway; Sh2.7 billion on the Nakuru-Kisumu railway line and Sh400 million on the Port of Kisumu. It also remitted an extra Sh11.2 billion to the Government in the 2019/20 financial year. All the revenue contributing to the stimulation of Kenya’s economic recovery and growth.
To keep up with the developments and rate of growth in the fibre optics sector, KPC has embraced modern technologies and trends to ensure things work quickly, proficiently and securely. According to Dr. Irungu, the Corporation has capitalized vastly on a modern 96 core fiber optic cable that is about 1,000 KMs long.
“This network cable runs along the oil pipeline from the port city of Mombasa to Nakuru where it branches off to both Eldoret and Kisumu. We are licensed by the Communications Authority of Kenya to lease the fiber resource to telecommunications providers who in turn use it to carry data traffic.
Our partners in this data carrier space include Safaricom, Jamii, & Wananchi Telecom,” he mentioned.
The cable design is so flexible that it enables these telecommunication service providers to serve their clients in townships along the Mombasa-Nairobi-Nakuru- Eldoret & Kisumu commercial corridor and the surrounding areas comfortably without experiencing lagging and breakouts.
Despite a stiff competition in high speed internet provision in the region, KPC’s fiber remains the most sort out and most secure over competitors’ due to its enhanced protection against damage or fiber cuts. This is also coupled with the fact that it runs underground next to the oil pipeline thus making it highly available and extremely reliable for internet and other data services.
Competency Training in Oil and Gas…
The Morendat Institute of Oil & Gas (MIOG), established to offer capacity building in oil pipeline management, operations and maintenance is a Centre of Excellence. The institute embraces competency-based education and training model which calls for 70% hands on and 30% theory training.
MIOG is accredited by Technical, Vocational and Education Authority (TVETA) and complies with the Kenyan TVET Act, Curriculum Development Assessment and Certification Council (CDACC), and the National Qualification Authority (NQA) rules and regulations.
The technology which bridges between theory and practical training, provides programs which can be accessed both online and offline; thus it prepares and assesses trainees through real life, hands-on practical training.
Programs are embedded in two standard classrooms with more than 80 specialized training programs which can be accessed by between 24 to 30 students simultaneously. The 80 programs contain 4,800 lessons and about 1,000 interactive experiments.
The Covid-19 pandemic negatively impacted the smooth running of MIOG training due to the need for social distancing. The new normal brought about by the coronavirus reality compelled organizations to embrace online competency-based education while others shut down educational facilities for almost a year. The most affected courses were technical which cannot be considered complete without the trainees undergoing the actual hands-on practical training experience.
To counter this the institute made use of its Smart Classroom technology which was introduced in 2019 and established in line with KPC’s Vision 2025’s aimed at setting up an oil and gas investments hub in the region, thus entrenching Kenya as the gateway to East & Central Africa.
To ensure business continuity, MIOG embarked on online training for the Safety, Health and Environment course which proved to be convenient and cost effective. Among the online courses conducted during the pandemic were: Workplace Safety, Health and Environment, Fundamentals of Oil and Gas Operations, permit to Work (PTW) Systems and Domestic Safety.
Inuka Programme, CSI During the COVID – 19 Pandemic
KPC has established strong Corporate Social Investment (CSI) programs where they collaborate closely with all the communities in Kenya, and especially those neighbouring the installations which includes Depots, Pump Stations and along the Right of Way (ROW) which stretches from Mombasa, traversing 14 Counties to Kisumu and Eldoret.
These CSI programs include a scholarship program famously known as “Inuka”, meant to benefit the needy and People living with Disability (PWDs). The twofold program; Inuka Social Empowerment Program is aimed at enabling People living with Disability (PWDs) access skills-based training and other economic opportunities and the Inuka Scholarship Program that enables PWDs access Secondary education.
Since inception of Inuka in 2016, the Company has consistently sponsored the 47 counties through the Inuka Scholarship Program, educating one child per county. “Through the company’s CSI, we have been able to offer scholarship to children living with disabilities to access secondary school education. I can happily confirm that we have enrolled a total of 188 girls under the special program,” said Dr. Irungu.
Those who will successfully complete their secondary school education, will continue to enjoy the company’s support till they achieve their optimum dreams in their chosen fields.
Through the scholarship KPC has spent about Sh52 million translating to Sh14 million every year. In addition, the Company has built a girl’s dormitory at Karare Secondary School in Marsabit County to retain girls in school where they are encouraged and mentored to take up science courses as well as motivate them to value education.
Considering that the locality in the past has considered girl child education as waste of time and resources this is a great feat.
Educational sponsorship is just one of many programs the company is supporting through its Foundation. Such programs are aligned with focused areas as detailed in its CSI policy. These programs cover different sectors such as: Education, Health & Environment, Water and Sanitation, Sports for development and Support for Special Groups among others.
Some of the successful CSI projects include: Kochodin High School in Turkana County where KPC donated Kshs 10 Million towards the construction of a Dormitory, two classrooms and two pit latrines. This is in support of an earlier promise by His Excellency President Uhuru Kenyatta to the people of Ngamia 1 in Turkana County.
At the Cost of Kshs 5 Million, KPC also constructed a modern science laboratory at Lokitaung Girls High school in Turkana South. This in line with the company’s policy to empower girls in science related subjects.
Other key projects backed by the company under the budget of Ksh. 5 million include the construction of four classrooms at Uswet Primary School the construction of a modern Library at Hema Secondary School in Kisii County and sponsorship of medical camps across the country as well as sponsoring various Sports disciplines.
As the effects of Covid-19 ravaged the country KPC rolled out a free sanitizer campaign.
“Amidst the hard-economic times, we unburdened the poor and vulnerable members of our society from buying sanitizers. The trust between us, the Oil Marketing Companies and other like-minded stakeholders ensured that we successfully rolled out the campaign. We produced over 1.5 million litres of sanitizer which has been distributed to the most vulnerable groups in all Counties,” said Dr. Irungu.
In addition, KPC donated Sh55 million to the National Youth Service to produce masks which have gone a long way in assisting the less fortunate access masks. Over 1.5 million masks were produced and distributed to the most vulnerable groups in the society across the 47 counties in Kenya.