Kenya’s Ministry of Energy and the privately owned Dangote Group are in talks to secure a long‑term supply of liquefied natural gas (LNG) for a planned power generation facility linked to the Lamu oil refinery project, according to a report by The Africa Report. The prospective agreement would see the Nigerian conglomerate provide LNG to the coastal site, which is slated to become a hub for refining, petrochemical processing and electricity generation.

The discussions are part of Kenya’s broader strategy to diversify its energy mix and reduce reliance on imported diesel and heavy fuel oil for electricity. Officials have indicated that the Lamu refinery, still under construction, will include a dedicated power plant capable of converting LNG into electricity for the national grid. By partnering with Dangote, which has extensive experience in large‑scale energy projects across Africa, Kenya hopes to accelerate the commissioning of the power unit and improve the reliability of supply.

In parallel, the negotiations are expected to incorporate a supply pipeline from Tanzania’s offshore gas fields. Tanzania has recently confirmed substantial gas reserves in the Indian Ocean basin, and the government is seeking regional buyers for the resource. Kenya’s interest in Tanzanian gas aligns with its goal of establishing a regional energy corridor that could lower costs and enhance energy security for both countries.

The potential deal would also involve the construction of ancillary infrastructure, such as a floating storage and regasification unit (FSRU) and associated pipelines, to handle the import, storage and distribution of LNG at Lamu. The Africa Report notes that such facilities would be critical to ensure a steady feedstock for the power plant and to enable the export of surplus gas to neighboring markets.

Stakeholders have highlighted the economic benefits of the arrangement, including job creation during the construction phase and the prospect of lower electricity tariffs for Kenyan consumers once the plant becomes operational. The partnership could also bolster Kenya’s position as a regional energy hub, complementing existing projects like the East African Crude Oil Pipeline and the planned Kenya‑Uganda electricity interconnector.

While details of the contract remain confidential, sources familiar with the talks indicated that the parties are aiming to finalize terms within the next twelve months. The agreement would be subject to regulatory approvals from both Kenyan and Tanzanian authorities, as well as compliance with international trade and environmental standards.

If concluded, the LNG supply deal would mark a significant step in deepening economic ties between Kenya, Nigeria and Tanzania, and could set a precedent for similar cross‑border energy collaborations in East and West Africa.

Reporting attribution: based on reporting by The Africa Report — original source: https://www.theafricareport.com/429709/kenya-dangote-eye-lng-power-deal-at-lamu-refinery-target-tanzania-gas/.