For Immediate Release
21 October 2021
Bethesda, MD – K&M Advisors has been engaged by the Kenya Electricity Generating Company PLC (KenGen) on behalf of the Government of Kenya and the country’s energy sector to conduct a feasibility study for natural gas power generation in Kenya. While Kenya does not have its own domestic natural gas resources, the study will examine the potential to create a domestic natural gas market for power generation and industrial use via importation with the aim to help diversify the country’s energy mix, improve energy security, reduce the cost of electricity and reduce greenhouse gas emissions.
The feasibility study will examine the technical, economic, financial, and environmental and social feasibility of 1) the development and operation of a liquefied natural gas (LNG) import terminal in Mombasa, 2) conversion of Kenya’s 10 existing heavy fuel oil (HFO) and kerosene power plants to natural gas and 3) the development of a new natural gas power generation plant in and around Mombasa. The study is organized into seventeen tasks that will be implemented over a 10 to 12 month period.
K&M will 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. The study will then identify and cost viable LNG sourcing, shipping, import terminal, logistics and transportation options. Various LNG import terminal sites in Mombasa and floating and onshore configurations will be analyzed. K&M will assess whether natural gas sourced from an LNG import terminal in Mombasa could produce electricity at a lower cost than HFO or kerosene. LNG transport via LNG trailers or rail will also be considered.
The study will 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. The K&M team will also analyze how to procure the various components of the LNG supply chain competitively. In parallel, K&M will evaluate the feasibility of converting the existing HFO and kerosene plants to natural gas as well as construction of a greenfield natural gas plant.
K&M President Alfonso Guzman commented: “We are extremely pleased to start another engagement with KenGen and use our team’s extensive experience on LNG-to-Power projects to assist Kenya in finding a viable solution for introducing natural gas to Kenya’s generation matrix”.
K&M’s team includes experts from COWI, Lisbon Group, POWER Engineers, Environmental Resources Management (ERM), TripleOK Law, Herbert Smith Freehills (HSF), Ramani, Rock Link, and PAA.
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