Sunday, February 12, 2006

Ship Stuck At Sea With Kenol Oil

Hostilities between fuel marketers Kenol/Kobil and national transporter Kenya Pipeline Company (KPC) escalated yesterday with complaints by Kobil that their ship had been turned away at Kipevu, Mombasa. It said KPC had only allowed part of the cargo to be discharged. Kobil dug in yesterday instructing the ship to stay put until it had discharged fully. KPC in turn said it had warned them not to bring in the cargo. KPC operations manager Peter Mecha said the storage capacity stood at 300,000 cubic metres with monthly storage at 210,000 only.
KPC's Kipevu oil storage facility near Mombasa, Kenya
Alternatively, Kobil threatened to offload the cargo in other markets which would cause a shortage in the local market: "The situation is also likely to affect supplies to foreign countries that rely on Kenya for their supplies, including Uganda and Burundi." KPC said there was no possibility of a shortage. The stand-off in the midst of court battles over monies claimed by each party came only a day after KPC had started to supply the firms controlling over one-fifth of the oil market. On Sunday, KPC cut off the joint marketers claiming non-payment of Sh 39 million for service. "Vessel MT Sunshine carrying 35,000 cubic metres of Gasoil and Jet A1 has finally berthed at Kipevu Oil Terminal," said a statement. "However, it is disturbing that the ship will only be allowed to offload 2,500 M3 of the product, which is an unfortunate situation for the industry and the country as a whole." CEO Jacob Segman yesterday lodged a complaint with Energy PS Patrick Nyoike. Kenol/Kobil had declined to pay the money claiming it was offsetting the same against handling and storage costs - arising from staying in the high seas - incurred by failure of KPC to allocate the space at its Kipevu Oil Storage Facility (KOSF). They claimed the move would cost them $36,000 daily in handling and storage costs. "It is our position that this is completely out of direction as per our Trading and Supply Agreement with KPC, Clause 3 (4). We have given the ship owners instructions not to leave the jetty until the full load is discharged in order to avoid demurrage charges." Kobil said it had written to KPC saying the ship would dock last week and the latter checked availability of space. "They insisted on bringing the ship even after we told them about the situation a month ago before the ship started sailing," said the KPC operations manager.

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