Kenya’s Refinery Takes First Delivery of Oil as Merchant

Kenya Petroleum Refineries Ltd., the East African nation’s only oil processor, said it took the first delivery of crude since it began sourcing fuel to process and sell refined products to retailers.

A shipment of 82,000 metric tons of Murban crude was delivered to Mombasa port on July 21 after being purchased by Galan Oil, a trading company, for $65 million, the company said in an e-mailed statement today.

The company, based in Mombasa, used to take crude from fuel retailers and refine it for a fee, under what is known as a tolling arrangement. Kenya last year announced plans to drop that model and become a so-called merchant refiner, after KPRL customers complained of losses and inefficient processing.

KPRL, as the company is known, will now compete with Kenyan companies including KenolKobil Ltd., the East African nation’s biggest fuel retailer by market value, in importation of crude for processing. Last month KenolKobil was awarded a tender to deliver 30,704 tons of automotive gasoil in July and 50,000 tons of premium motor gasoline in August.

KPRL is jointly owned by Essar Energy Plc and the Kenyan government.

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