The government is exploring the possibility of listing the Kenya Pipeline Company through an Initial Public Offering at the NSE (Nairobi Securities Exchange), a move expected to enhance its financial capacity and regional expansion. This was revealed by National Treasury Cabinet Secretary John Mbadi while receiving an interim dividend cheque of Kenyan shillings 3 billion from Kenya Pipeline Company Board Chair Faith Boinett for the half-year ending December 2024.
This latest dividend payout brings the Kenya Pipeline Company’s total remittances to the National Treasury over the past year to Kenyan shillings 10.5 billion, reinforcing the company’s strong financial standing.
Why Listing Kenya Pipeline Company on NSE Matters
Speaking at the ceremony, National Treasury Cabinet Secretary John Mbadi emphasized the potential benefits of listing Kenya Pipeline Company, citing the success of Safaricom and Kenya Electricity Generating Company, which have leveraged the NSE listing for growth.
“We have this feeling that Kenya Pipeline Company needs to realize the benefits that will accrue from a listing at the stock exchange,” said National Treasury Cabinet Secretary John Mbadi. “Listing will be a good idea, especially as Kenya Pipeline Company expands into the region. It will provide much-needed liquidity and capital for expansion into Liquefied Petroleum Gas, and Kenyans will have a chance to own a piece of Kenya Pipeline Company.”
Strategic Growth and Regional Expansion
The Kenya Pipeline Company is positioning itself as a key player in the region’s energy sector. As part of its business growth and diversification strategy, the company is considering setting up a trading hub in Mombasa to facilitate the receipt, trading, and distribution of petroleum and petroleum products. This initiative is expected to strengthen the regional oil and gas industry.
Additionally, Kenya Pipeline Company is expanding its footprint beyond Kenya, with a 90 percent market share in fuel transportation to Uganda and plans to replicate this success in Rwanda.
The Kenya Petroleum Refinery Limited Transition
The National Treasury also reaffirmed its commitment to resolving the long-standing issue of winding down Kenya Petroleum Refinery Limited and integrating it into Kenya Pipeline Company. National Treasury Cabinet Secretary John Mbadi noted that unnecessary delays had plagued the process and promised swift action in collaboration with the Ministry of Energy to complete the transition within the current financial year.
Kenya Pipeline Company’s Financial Performance and Efficiency Gains
The Kenya Pipeline Company’s financial strength is evident in its Kenyan shillings 10.5 billion profit before tax for the financial year ending June 2024, up from Kenyan shillings 7.6 billion in the previous year. Since 2014, the company has paid a cumulative Kenyan shillings 63 billion in taxes and dividends.
Board Chair Faith Boinett attributed Kenya Pipeline Company’s profitability to operational efficiency and diversification into new revenue streams such as Fiber Optic Cables and Liquefied Petroleum Gas.
“We are steadfast in our commitment to regional competitiveness. Holding a 90 percent stake in fuel transportation to Uganda and eyeing a similar share in Rwanda demonstrates our strategic efforts to cement our leadership in the regional energy and logistics sector,” she stated.
Operational Efficiency and Sustainability
The Kenya Pipeline Company’s improved operational model has led to:
- 37 percent increase in flow rate on the Mombasa-Nairobi pipeline
- 20 percent increase in flow rate on the Nairobi-Western Kenya pipeline
- Elimination of 22,100 trucks per month from the Mombasa-Nairobi route, significantly reducing carbon emissions
Additionally, the Kisumu Oil Jetty has optimized fuel supply to the region, having loaded over 320 million liters to date.
Commitment to Environmental Sustainability
Beyond financial performance, the Kenya Pipeline Company has reinforced its environmental conservation efforts:
- Planted 600,000 tree seedlings since 2017
- Mangrove reforestation in Jomvu Kuu Creek, Mombasa, with 440,000 seedlings planted in collaboration with local communities and government agencies
Digital Transformation and Infrastructure Expansion
The Kenya Pipeline Company is also leveraging its fiber optic network to enhance revenue streams and support Kenya’s digital transformation agenda under Vision 2030. By lighting its fiber network, the company aims to:
- Tap into the growing demand for high-speed internet
- Provide reliable connectivity to businesses and communities
- Contribute to bridging the digital divide
Additionally, the Morendat Institute of Oil and Gas has been gazetted as a National Polytechnic, solidifying Kenya’s position as a regional hub for oil and gas expertise.
What’s Next for Kenya Pipeline Company?
With strong financials, a strategic expansion plan, and a potential listing on the NSE, the Kenya Pipeline Company is poised to play a crucial role in Kenya’s economic growth. The move will not only enhance the company’s capital base but also provide Kenyans with an opportunity to invest in one of the country’s most profitable state enterprises.
As discussions progress, stakeholders will be keenly watching for official details on the Initial Public Offering timeline, share pricing, and investment prospects.
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