The Kenyan government is considering listing the Kenya Pipeline Company (KPC) through an Initial Public Offering (IPO) on the Nairobi Stock Exchange, as revealed by National Treasury Cabinet Secretary Hon. John Mbadi.
He announced this while receiving an interim dividend cheque of Ksh.3 billion from KPC Board Chair Mrs. Faith Boinett for the half-year ending December 2024 at the company’s headquarters in Nairobi.
The dividend payment brings the total dividends paid by KPC to The National Treasury in the last 12 months to Ksh.10.5 billion.
“We believe that KPC should realize the benefits of being listed on the Stock Exchange,” said CS Mbadi, citing Safaricom and KenGen as examples of companies that have thrived after listing.
“Listing will provide the necessary liquidity and capital for KPC’s regional expansion and diversification into LPG, giving Kenyans the opportunity to own a piece of KPC.”
As part of its growth plans, KPC is considering establishing a trading hub for the receipt, trading, and distribution of petroleum and petroleum products in Mombasa, which will benefit the regional oil and gas industry.
CS Mbadi also mentioned that The National Treasury supports the plan to wind down Kenya Petroleum Refinery (KPRL) and integrate it into KPC.
The dissolution of KPRL has been unnecessarily delayed and assured that The National Treasury will work with the Ministry of Energy to complete the transition smoothly within this financial year – Mbadi said.
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Lawrence Kibet, Director General of Public Investments and Portfolio Management, said Government Owned Enterprises (GOE) Bill 2024 has been passed by the Cabinet and is under review by the Attorney General. The Bill outlines the “commercial principles and procedures for establishing a Government Owned Enterprise” and establishes governance structures.
The Bill, according to Kibet, will ensure a worthy Return on Investment (ROI) from public-owned institutions by granting them autonomy, eliminating unnecessary red tape and bureaucracy, and providing a competitive edge in the marketplace while reducing reliance on State funding.
CS Mbadi congratulated the KPC Board and Management for their stellar financial performance for the year ended June 2024.
“KPC’s Ksh.10.5 billion profit is a significant achievement, reflecting the company’s operational efficiency, sound management, and dedication to delivering value to stakeholders,” said CS Mbadi.
Over the last 10 years, KPC has paid a total of Ksh.63 billion in taxes and dividends. In 2023-24, KPC posted a Ksh.10.1 billion Profit Before Tax (PBT), an increase from the Ksh.7.6 billion recorded the previous year.
Mrs. Boinett attributed KPC’s strong financial performance to efficient operations and diversification into new revenue streams such as Fiber Optic Cables (FOC) and LPG.
“KPC remains committed to regional competitiveness, holding a 90% stake in fuel transportation to Uganda and nearing a similar share in Rwanda. This demonstrates our strategic efforts to cement our leadership in the regional energy and logistics sector.
We extend our gratitude to The National Treasury for their efficiency and collaboration, which have been instrumental in KPC’s success,” she said.
Also present at the ceremony were Mr. Joe Sang, Managing Director of KPC, KPC Board Members, and senior management.
KPC received its audited results in November 2024 with a clean audit opinion, reflecting robust business processes, transparency, and accountability. The business has grown, and the future looks promising, ensuring financial stability despite a volatile operating environment.
The change in operating philosophy has increased the flow rate on the Mombasa–Nairobi and Nairobi–Western Kenya lines by 37% and 20% respectively, without additional capital expenditure.
For a continued supply of products in the country and the region, the business has optimized the Kisumu Oil Jetty (KOJ). As a result, more than 320 million litres have been loaded to date.
The pipeline operation removes approximately 22,100 trucks from the road from Mombasa to Nairobi monthly, equating to about 4,479,493.2 tCO2 annual emission offset.
To further demonstrate its commitment to environmental sustainability, KPC has engaged in various greening initiatives since 2017, planting approximately 600,000 tree seedlings across the country in partnership with various organizations.
KPC’s mangrove reforestation programme at Jomvu Kuu Creek in Mombasa County, in collaboration with Community Forest Associations, the Kenya Forest Service, and the Mombasa County Government, has planted over 440,000 seedlings.
The gazettement of Morendat Institute of Oil and Gas as a National Polytechnic enhances the petroleum and gas sectors and serves as a centre of excellence in the region.
Additionally, KPC is lighting its extensive fibre optic network, a strategic move to enhance revenue and promote sustainability. This initiative aims to tap into the growing demand for data and high-speed internet, providing reliable connectivity to various sectors. It aligns with Kenya’s Vision 2030, supporting digital transformation, fostering economic growth, and bridging the digital divide, especially in areas lacking internet access.
