The government has confirmed the acquisition of Kenya Petroleum Refineries Ltd (KPRL) by Kenya Pipeline Company through transfer of shares to bolster utilisation of the asset that was closed down in 2014 due to constant losses.

Energy Cabinet Secretary Davis Chirchir said the move follows Cabinet meeting that gave a nod for the acquisition of the refinery by KPC without monetary considerations, to enhance petroleum supply chain infrastructure, security of supply and cost efficiency through minimised demurrage costs.

He said the acquisition will enhance penetration of Liquefied Petroleum Gas (LPG) usage in the country through the development of LPG bulk import handling and storage facilities.

“You will recall that our refinery was closed down sometime in 2014 because of challenges of what we call yield shift… the product that we were refining was not matching the output that was planned and therefore it was not making a profit,” he said during a joint address with Mombasa Governor Abdulswamad Nassir.

Chirchir added that though it has been a while there is no reason why KPRL is not working for the country as a prime asset with 370 acres.

The CS noted that KPC comes into KPRL with a very strong balance sheet of about Sh150 billion and it is there expected to help the sleeping refinery facility to instantly roar back to life and recreate the economy in Mombasa.

“With a strong company coming in to take KPRL we can start seeing activities of what KPRL should be in terms of recreating the economy in Mombasa, creating employment, telling us whether they are going to go the refinery way, or focus on storage and bring in other investors because an asset of 370 acres is such a big facility,” Chirchir stated.

Completion of the deal comes in the backdrop of intensified campaign on use of LPG as a transitional fuel.

Chirchir observed that the acquisition is the right move as it will go a long way in helping the country achieve the agenda of substituting biomass to use of LPG.He said the government has made a deliberate policy to grow from the current about seven per cent kilograms of LPG per household per capita to 15 in the next three four to five years.

“We will need extra facilities to do that, we need to take advantage of being a bunkering facility in the region and working with this Sh150 billion balance sheet we will be able to leverage and bolster opportunities for our youth,” the CS added.

Following the move, he said the government will now embark on working closely with the County government with a view to revamping KPRL for the benefit of the people of Mombasa and Kenyans and the East African region at large.

The acquisition means the entire asset will now be under KPC, according to the CS who allayed fears of any job losses, saying they contracted price water coopers which zeroed in on the acquisition by transfer of shares as the best option as opposed to the transfer of business.