Kenya Pipeline Company Downplays Threat from Uganda’s New Oil refinery
Nairobi, Kenya – january 22, 2026 – Kenya Pipeline Company (KPC), the nation’s primary oil products transporter, has asserted that Uganda’s enterprising $4 billion oil refinery project will not significantly impact its regional operations or export volumes in the foreseeable future. This statement comes amidst growing concerns within the East African oil industry regarding the potential for reduced reliance on Kenyan infrastructure once the refinery becomes operational.
the planned refinery, situated in Uganda’s Albertine Graben, is projected to process 60,000 barrels of crude oil daily, with initial operations anticipated between 2029 and 2030. The Uganda National Oil Company will hold a 40% stake in the venture, with the remaining shares controlled by Alpha MBM Investments LLC.
Currently, Uganda imports approximately $2 billion (Sh258 billion) worth of refined petroleum products annually, the majority of which are transported through Kenya’s pipeline network and port facilities. Industry analysts have suggested that the Ugandan refinery could jeopardize KPC’s regional expansion plans, particularly the proposed Eldoret-Kampala-Kigali refined petroleum products pipeline.
However,KPC Managing Director Joe Sang dismissed these concerns during a recent media briefing held in Nairobi,coinciding with the company’s ongoing Initial Public Offering (IPO). “Uganda’s refinery is not a threat. It will take up to 15 years for Uganda to start refining oil,” Sang stated, emphasizing the considerable timeframe before the refinery reaches full operational capacity.
KPC is currently divesting government-owned shares, offering 11.81 billion ordinary shares at Sh9 per share, representing a 65% ownership stake. The company plans to finance future investments through a combination of internally generated funds, debt capital markets, Special Purpose Vehicle (SPV) project financing, joint ventures, and strategic partnerships.
According to IPO documentation, approximately 90% of KPC’s refined petroleum throughput – estimated at 2.5 billion litres annually – is currently exported to Uganda, making it the company’s largest transit market. Despite Uganda’s refining ambitions, KPC remains confident that the landlocked nation will continue to require refined petroleum imports for the foreseeable future.
“Even when refining capacity becomes a reality, world oil markets are fully integrated. There are no regional oil markets; all oil competes globally based on production efficiency and scale economics,” the company explained. Furthermore, KPC argues that current consumption levels in Eastern Africa are insufficient to justify large-scale crude oil refining that could compete with established global markets, suggesting that imported refined products will remain a crucial component of the region’s energy supply for years to come.
this assessment underscores KPC’s belief in its continued relevance as a key player in the regional petroleum supply chain, even as neighboring countries develop their own refining capabilities.
Keywords: Kenya Pipeline Company, KPC, Uganda Oil Refinery, Oil Industry, East Africa, Petroleum, energy, Investment, IPO, Infrastructure, Regional Trade, Oil Imports, oil Exports.
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