NAIROBI, Kenya – Kenya Pipeline Company (KPC) has signed a 25-year crude oil storage and handling agreement with Gulf Energy projected to generate approximately Sh93.68 billion in gross revenue, months after the government sold a majority stake in the company.
The agreement was entered into through Kenya Petroleum Refineries Limited (KPRL), a wholly owned KPC subsidiary, and Gulf Energy E&P B.V. (GEBV).
In a notice dated August 26, 2026, KPC said the long-term contract covers the receipt, storage, handling and delivery of crude oil for export through the Kipevu Oil Terminal II (KOT II) in Mombasa.
KPC expects Sh93.68 billion over 25 years
KPC said its internal projections indicate that the contract could generate approximately Sh93.68 billion in gross revenue over its 25-year duration.
However, the company cautioned that the figure is not a guaranteed revenue commitment.
The projection is based on anticipated crude oil throughput and applicable tariff assumptions, meaning actual revenue could vary depending on volumes handled and other contractual factors.
“Current internal projections estimate gross revenue of approximately Sh93.68 billion over the 25-year contract period. This estimate is, however, based on projected throughput and tariff assumptions and does not constitute a guaranteed revenue commitment,” KPC said.
The contract is expected to increase the commercial utilisation of KPRL’s existing and upgraded infrastructure while expanding KPC’s involvement in petroleum storage and logistics.
The company said the agreement will support its long-term revenue outlook through fixed service fees and recovery of qualifying variable costs.
Crude oil to be handled through KOT II
Under the agreement, KPRL will provide services connected to crude oil destined for export through KOT II.
The terminal, operated by the Kenya Ports Authority (KPA), serves as an important marine interface within Kenya’s petroleum infrastructure.
The arrangement allows KPC to leverage its storage and transportation infrastructure while supporting the movement of crude oil through the country’s petroleum logistics network.
KPC and KPA revise KOT II agreement
KPC also announced a separate development involving KOT II, saying it had revised its Service Level Agreement with the Kenya Ports Authority.
The revised agreement replaces an earlier arrangement and clarifies the respective responsibilities of KPC and KPA in the operation and maintenance of the terminal.
According to KPC, the new agreement strengthens provisions covering accountability, performance monitoring, maintenance coordination and business continuity.
Although the revised agreement is not expected to generate significant direct revenue, KPC described it as strategically important to maintaining reliable petroleum supply operations.
“Although the agreement is not expected, by itself, to have a significant direct monetary value, it is operationally critical to KPC and to the reliable receipt and onward transportation of petroleum products serving Kenya and regional markets,” the company said.
KPC expands role in petroleum logistics
KPC said the two agreements collectively strengthen its position in Kenya’s petroleum supply chain while helping optimise KPRL’s infrastructure.
The company said the arrangements also provide a basis for diversified and sustainable revenue generation as it expands beyond traditional pipeline transportation into broader petroleum logistics services.
The long-term Gulf Energy agreement comes at a significant period for KPC, following the government’s decision to sell a majority stake in the company.
The new contract could therefore provide an important long-term commercial opportunity for the pipeline operator, although the projected Sh93.68 billion remains dependent on future crude volumes and tariff assumptions.
KPC said it will continue monitoring implementation of the agreements and make additional disclosures where required under applicable laws and the Nairobi Securities Exchange Listing Rules.
