Regulator faults KPC for altering Sh48bn oil line

Kenya Pipeline Company (KPC) dropped plans to install a leak detector from approved design of the Sh48 billion new Mombasa-Nairobi pipeline that has been hit with leakages less than year after launch, energy regulator reveals.

Energy and Petroleum Regulatory Authority (Epra) said the pipeline design approved by the environmental watchdog provided for a digital leak detection system with the capacity to monitor 450-kilometre line real-time.

The authority has now fired a warning letter to KPC on why the firm and its executives should not face punishment over the illegal design changes.

The warning comes when leaks and theft of fuel through illegal taps on the pipeline have been reported.

“Epra wrote to KPC on July 1 to show cause why stiff penalties should not be imposed on the company for failure to institute appropriate environment, health or safety control measures, an offence stipulated under Section 99(1)(b) as read with Section 99(1) (ii) of the Petroleum Act, 2019,” Pavel Oimeke, the Epra director general told MPs yesterday.

The Senate directed Epra to recommend to the DCI the prosecution of four KPC general managers in charge of infrastructure who oversaw the construction of the pipeline, KPC’s local and foreign contractors and the contractor, Zakhem International.

Penalties include a fine of not less than Sh10 million or a term of imprisonment of not less than five years, or both.

Sh10 million or a term of imprisonment of not less than five years, or to such fine and imprisonment,” the Act states.

Mr Oimeke accused KPC of failing to install a Digital Pipeline Leak Detection System contrary to the initial design described in the Environmental Impact Assessment (EIA) report submitted to EPRA and Nema.

The system was envisioned to pick up leaks in case of pipeline intrusion or raptures due to corrosion in minutes and in short sections of the pipeline in seconds.

Mr Oimeke said EPRA has also directed KPC to ensure that a Leak Detection System is immediately installed to enhance easy identification of future points of leaks.

Parliament recently heard that KPC plans to procure a Sh2 billion ($20 million) oil leak detection system after rejecting an offer of Sh400 million ($4 million) by the contractor who built the 450-kilometre line.

“We have requested a supplementary budget to install the leak detection system in the financial year 2019/20. The leak detection system was not part of the scope of works done by Zakhem International the contractor of the project. It was to be undertaken by another contractor,” KPC acting Managing Director Hudson Andambi said recently.