BTA2023 The government of Kenya is considering a $1.7 billion railway project aimed at transporting crude oil from its north-western oil fields to the Indian Ocean by 2030, as part of efforts to strengthen the country’s energy export infrastructure.
The proposed project involves constructing about 640 kilometers of meter-gauge railway connecting Nakuru in Kenya’s Rift Valley to South Lokichar, where the country’s key oil reserves are located.
According to a parliamentary report approving the development plan of Gulf Energy, the rail project could serve as a cost-effective logistics solution for transporting crude oil while also supporting broader commercial freight activity.
Rail Transport Seen as Cost-Effective Oil Export Route
The railway will use rail tank cars to transport crude oil, providing a flexible alternative to pipeline infrastructure.
Officials say the line will also carry other commodities such as clinker, cement, and minerals, improving the project’s long-term commercial viability and making it an important component of Kenya’s logistics network.
Kenya opted for a meter-gauge railway instead of a standard-gauge system because it is cheaper to construct and better suited to the region’s terrain, requiring less tunneling and lower engineering costs.
A standard-gauge railway alternative would have increased the project cost by roughly 300 billion Kenyan shillings, significantly raising the overall investment.
Oil Production Plans Driving Infrastructure Investment
The railway proposal comes as Kenya seeks to develop its emerging oil sector around the Lokichar Basin.
Previously, Tullow Oil had planned a $3.4 billion pipeline project to export crude oil from the region. However, the company later sold its Kenyan assets as part of a debt reduction strategy.
Under the new development plan led by Gulf Energy, oil production is expected to begin with 20,000 barrels per day transported by insulated road tankers.
Over time, production could increase to 50,000 barrels per day, with crude transported via insulated and steam-heated rail wagons designed to handle the region’s waxy crude oil.
A Strategic Move for Kenya’s Energy Exports
If implemented, the railway project could significantly enhance Kenya’s ability to export crude oil through Indian Ocean ports, positioning the country as a more active player in East Africa’s energy sector.
Beyond oil exports, the rail infrastructure is expected to support broader industrial and mineral transport, potentially strengthening trade and logistics across the region.
Industry analysts say the project reflects a broader trend among African economies investing in multi-use infrastructure that supports both energy development and commercial trade.
