Dangote’s oil refinery in Lamu to include petrochemical complex, David Ndii

Economist David Ndii has revealed that the planned Ksh2.2 trillion East African oil refinery in Lamu will be developed as a wider petrochemical complex involving additional industries beyond oil processing.

According to Ndii, the petrochemical complex would increase value addition by at least 50 per cent compared to a standalone refinery. 

“We are building a petrochemical complex, not just a refinery, which will add value by at least 50 per cent,” he wrote.

While a refinery mainly produces products such as diesel, petrol, fuel oil and other petroleum products, a petrochemical plant converts oil and natural gas by-products into chemical materials used by many other industries. 

The planned complex in Lamu would therefore include facilities that produce raw materials for industries such as plastics manufacturing, packaging, construction and consumer goods. 

These facilities could produce materials such as polyethene (PE), polyvinyl chloride (PVC) and polystyrene (PS), which are used to make items including plastic containers, pipes, household products and industrial packaging. 

Other chemical products, such as resins, polymers and solvents, would support manufacturers that rely on these materials to produce finished goods.

Further, a petrochemical complex could also support agriculture through the production of by-products used to make fertilisers and farming-related chemicals.

Industries producing paints, detergents, cosmetics, synthetic fibres and other consumer products could also utilise outputs such as methanol and chemical intermediates.

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Beyond processing, the plant would create opportunities for businesses involved in storage, transportation, distribution and manufacturing. 

With businesses forming part of the wider industrial ecosystem around the refinery, the project is also expected to increase employment and support related economic activities.

Ndii said the planned facility is expected to increase Lamu County’s Gross Domestic Product (GDP) by about Ksh322.9 billion ($2.5 billion), placing it among counties with the highest GDP contributions.

The economist explained that the projected boost would be equivalent to roughly 25 per cent of Kenya’s current manufacturing GDP, estimated at about Ksh1.29 trillion ($10 billion), although he noted the figure could be an underestimate. 

The latest details on the project emerge after President William Ruto confirmed that preparations for the project’s launch are at an advanced stage, with a groundbreaking date already set.

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