Kenya eyes LNG-to-power project

Kenya is looking to develop an LNG-to-power project in order to diversify the country’s energy mix, reduce the cost of electricity, and slash emissions.

US advisory firm K&M Advisors said in a statement it has won a contract from state-controlled Kenya Electricity Generating Co (KenGen) to conduct a feasibility study for natural gas power generation in Kenya.

While Kenya does not have its own natural gas resources, the study would examine the potential to create a domestic natural gas market for power generation and industrial use via importation, the firm said.

K&M, a unit of the Dorado Group, said the feasibility study would examine the technical, economic, financial, and environmental and social feasibility for the development and operation of an LNG import terminal in the coastal city of Mombasa.

The study would also look into the conversion of Kenya’s 10 existing heavy fuel oil (HFO) and kerosene power plants to natural gas, and the development of a new natural gas power generation plant in and around Mombasa, it said.

K&M expects to complete the study over a 10 to 12 month period.

Floating or onshore

The US firm said it would start with assessing the LNG demand from converting existing power plants to natural gas, building a new power plant, and displacing HFO or diesel used by industries in the East African country.

The study will then identify and cost viable LNG sourcing, shipping, import terminal, logistics and transportation options.

K&M said it would look into various LNG import terminal sites in Mombasa, including floating and onshore configurations.

The firm will assess whether natural gas sourced from an LNG import terminal in Mombasa could produce electricity at a lower cost than HFO or kerosene.

Worth mentioning here, Kenya’s neighbor Tanzania could get an LNG export plant in the future. Shell and Equnior are pushing towards the development of Tanzania’s stalled LNG export project which includes sending the country’s offshore gas resources to a liquefaction plant in Lindi.

Besides the LNG import facility in Mombasa, K&M said the study would also look into LNG transport via LNG trailers or rail.

The study will also review contractual arrangements for implementing the project, including contracts for LNG or gas offtake from power plants, LNG or gas transport, LNG import terminal development and operations, and LNG supply ex-ship.

Moreover, the K&M team will also analyze how to procure the various components of the LNG supply chain competitively.

K&M added it would also evaluate the feasibility of converting the existing HFO and kerosene plants to natural gas as well as construction of a greenfield natural gas plant.

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