By Humphrey Malalo
NAIROBI, April 29 (Reuters) - Kenya will start a search next
week for companies to design a crude oil export pipeline costing
some $2.1 billion and which should be completed by 2021, Energy
and Petroleum Minister Charles Keter said on Friday.
Tullow Oil TLW.L and partner Africa Oil AOI.TO first
struck oil in Lokichar in northwest Kenya in 2012 and Keter said
the pipeline between Lokichar and Lamu on Kenya's coast would be
891 km long.
"In our estimation, if all goes well, the pipeline should
(be ready) in the second quarter of 2021," he said. "The capex,
I mean the cost, which can either come down or up, is $2.1
billion," Keter told reporters.
Uganda is also looking to build a pipeline to export its oil
and originally favoured a route though Kenya. But last week,
East African leaders said at a summit Uganda would build its
pipeline through Tanzania rather than Kenya.
France's Total TOTF.PA , one of the oil firms developing
Uganda's fields, had raised security concerns about the Kenyan
route. A Kenyan pipeline could at points run near Somalia, from
where militants have launched attacks on Kenya.
Tullow Oil, with stakes in both countries, had backed the
Kenyan route, saying it would be cheaper if oil from both
pipelines followed the same route.
Picking a route for the pipelines is vital for the oil
companies' final investment decisions on developing Uganda's and
Kenya's reserves, which are among a string of oil and gas finds
on Africa's east coast.
Tullow Oil said on Thursday the recoverable reserves from
its activities in Kenya totalled an estimated 750 million
barrels, up from 600 million barrels previously.
Africa Oil AOI.TO and Tullow were 50-50 partners in blocks
10 BB and 13T where the discoveries were made. Africa Oil has
since sold a 25 percent stake in those blocks to A.P.
Moller-Maersk MAERSKb.CO .
Tullow said earlier this week that the earliest the projects
in Kenya and Uganda could reach a final investment decision was
at least 18 months after the settling of the pipeline
route.
Keter said that while the pipeline project had not yet
reached financing stage, they had received inquiries from some
institutions about it.
"There are companies who have visited us, financial
institutions. Even last year, I think IFC (International
Finance Corporation) had shown some interest, (as has) African
Development Bank," Keter said
"These are ready. But they were waiting for the decision on
which route are we going to go."
(Writing by George Obulutsa. Editing by Jane Merriman)