A strong economy and a growth in development projects in Kenya has provided the ideal platform for Vivo Energy Kenya to expand its storage offering
A surge in demand for diesel and petrol products driven by a blossoming economy has spurred Vivo Energy Kenya to expand its midstream assets to reach more inland energy markets.
The company, which distributes and markets Shell-branded products and services in Kenya, has been on a growth trajectory over the past four years as a result in a surge in demand for diesel products at service stations as well as in manufacturing and agricultural sectors.
In 2015, the company expanded petrol storage at its Shimanzi facility in Mombasa with two fuel storage tanks with a total capacity of 14 million litres of petrol. Additionally, in September 2016, a 23 million litre diesel storage tank and a five million litre petrol tank were also commissioned.
INFRASTRUCTURE TO MEET DEMAND
This additional capacity means the operator can transport fuel faster from the constrained Kenya Pipeline Company, which is the main pipeline for fuel transportation from Mombasa to inland regions, into its terminals in Mombasa and Nairobi and keep the country well supplied.
This investment will also serve as an avenue to supplement the current ullage received from the pipeline and allow the company to support inland markets as well as Vivo Energy Uganda.
In an interview with Tank Storage Magazine distribution manager Henry Mwangi explains that markets in Kenya as well as wider East Africa are growing as economic activity continues to expand and that Vivo Energy Kenya is well placed to support this growth by facilitating faster product delivery.
‘The economic growth has increase demand for petroleum products, hence the need for more storage and infrastructure. The general economic growth in the country has been very positive – it has been growing at 5% GDP and we see this continuing in the future.
‘As a result more infrastructure is being built and people are buying more vehicles and this has created a greater demand on our products and services.
‘We have seen a growth in our retail network as well as in the wider commercial sector. Over the last three years we have grown the company footprint and as a result the number of Shell service stations in Kenya has increased by 54% from 112 to 172.’
The commissioning of this extra capacity at its Mombasa facility increases the company’s overall diesel storage capacity to 53 million litres and its petrol capacity to 29 million litres.
‘Increasing diesel storage to this enormous amount is a sign of growth in the industry,’ says Mwangi.
‘With this increased storage capacity we will also utilise the railway more, to transport fuel from Mombasa to Nairobi.
‘Our Shimanzi Terminal in Mombasa is located in a coastal town near to the Kenya Ports Authority, which is the main port in Kenya where all imports and exports are delivered from. Also, our Mombasa terminal is strategically located near the main pipeline in Kenya for the Nairobi Terminal so we are well placed to serve the market’s needs.’
APPETITE FOR GROWTH
Vivo Energy Kenya’s parent company was established in 2011 to distribute and market Shell-branded fuels and lubricants and has ambitions to grow each of its 16 businesses spread across the continent by investing in new sites and facilities as well as injecting
At the heart of these growth projects is the ambition to remain a crucial link in the country’s supply chain. Mwangi adds: ‘We want to open up more Shell service stations and continue growing the commercial business, as well as creating more employment for Kenyans, and whilst ensuring security of fuel supply for our customers.’