Kenya government has began relocating Kipevu Oil terminal as it tries to increase capacity and reduce the frequent oil shortages.

According to the Kenya Ports Authority chairman Danson Mungatana the $120 million facility will take five years to be completed and will serve to reduce fuel prices as the country will be able to export huge amounts of fuel.

Formerly importers have heard to pay huge costs in demurrage costs resulting from ships stranded in the high seas as the Kipevu terminal has limited capacity.

Above the construction cost the project will also cost another $1.7 million to come up with a detailed design.

“Preliminary design of the new facility has been undertaken and the relocation agreed upon by all stakeholders. The detailed design will cost 1.7 million dollars while construction of the facility will cost about 120 million dollars,” said Mungatana.

The new terminal according to Mungatana will also be able to handle two large vessels each with a capacity of 100,000 tons of crude oil.

The project is part of the plan by the Kenya government to increase storage capacity of petroleum products by 22 percent in the next 3 years in anticipation of increasing demand and increased product from a new pipeline from Mombasa.

The four tanks to be constructed by the Kenya Pipeline Company (KPC) will have a capacity of 133.52 million liters bigger than the terminal in Nairobi that can hold 100,528 million liters bringing the total capacity in Kenya to 745.84 million liters from the current 612.32 million liters .