The scope, scale and spread of current and future oil and gas infrastructure development projects in East Africa

The scope, scale and spread of current and future oil and gas infrastructure development projects in East Africa

East Africa has been an importer of refined product, largely from the Middle East. The bulk of this product has entered the region via Mombasa in Kenya and also through Dar es Salaam in Tanzania. From these ports it has made its way, via pipeline and fuel trucks, across Kenya and Tanzania into Uganda, the Democratic Republic of Congo, Rwanda, Burundi, Ethiopia and even South Sudan.

With Tanzania currently returning annual GDP growth rates of anywhere between 5 and 10 per cent, Uganda maintaining

annual growth at around 7 per cent, and Kenya and Ethiopia achieving growth rates in excess of 5 per cent, East Africa’s consumption of gasoline, diesel and jet fuel is rapidly increasing.

Maina Kigundu, East Africa head of oil and gas at Standard Bank, added “the region, combined, spends in the region of at least US$5bn a year importing refined oil and gas products. Kenya alone accounts for 50 per cent of this spend. Given the foreign exchange impact of this outlay on most East African countries balance of payments, “the region has, traditionally, focused on import efficiency as a means of managing the import bill and costs for consumers.”

Kigundu observed that this realisation is coming at a time when, “local economic conditions, new oil finds and increasing investor appetite are converging to realise the vision of a more sustainable and efficient East African oil and gas production, supply and distribution ecosystem.”

This increase in local East African oil production combined with rapid economic growth is transforming the oil and gas infrastructure mix while also driving investment and development, integration and growth in East Africa’s oil and gas sector.