Tullow hires Wood to design Kenyan oil pipeline

(LONDON) – Tullow Oil hired Wood to design a pipeline needed to bring crude from Kenya’s Lokichar onshore fields to Lamu on the Indian Ocean coast, Wood said on Wednesday.

Kenya, which currently exports no crude, discovered commercial oil reserves in its Lokichar basin in 2012 and the 800-km (500-mile) pipeline is expected to be built before production is due to start in 2021/22.

Tullow operates the Kenyan fields, while the other investors are Canada’s Africa Oil and France’s Total. Kenya’s government is expected to take a stake through state-owned National Oil.

A government official told Reuters last month that Wood was picked to design the pipeline.

Tullow has said the Amosing and Ngamia fields in the basin have estimated contingent resources of about 560 million barrels, with plateau production potentially reaching 100,000 barrels per day.

The cost of the pipeline is estimated at $1.1 billion, with a further $2.9 billion needed for upstream operations, Tullow says. A final investment decision on the upstream and pipeline plans is expected in 2019.

Tullow picked Australia’s Worley Parsons as engineers for its oil blocks, a government official said.

Kenya moved a closer to full production at the blocs this month when the local government and the national government agreed on revenue sharing.

The agreement on revenue sharing will pave the way for the passage of a much delayed law on petroleum production, allowing Tullow to start shipping oil, which has been held in storage tanks for a year as it waited for the law.