Row over government's decision to lease strategic LPG handling facility to Nigerian firm

Energy Cabinet Secretary Opiyo Wandayi before the National Assembly on February 25, 2025. (Photo: National Assembly)

By Maureen Kinyanjui
Friday, June 13, 2025

A row is brewing over the Kenyan government's decision to lease a strategic liquefied petroleum gas (LPG) handling facility in Mombasa to Nigerian firm Asharami Synergy.

Lawmakers questioning the legality of the deal said a 31-year lease of 23.19 acres at the Kenya Petroleum Refineries Limited site is shrouded in secrecy.

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According to Senator Okiya Omtatah, the process was unconstitutional as it was not subjected to public participation.

“The decision of the cabinet does not align with Article 10 of the Constitution of Kenya. It was not submitted to public participation; therefore, it was a boardroom decision,” said Senator Omtatah.

Defending the deal, Energy Cabinet Secretary Opiyo Wandayi maintained that the lease is in line with the National LPG Growth Strategy and was guided by a cabinet directive in October 2023 geared toward promoting private sector investment in the LPG sector.

CS Wandayi clarified that Asharami Synergy emerged as the successful bidder from a pool of six prequalified companies, among them, Only Gulf Energy.

However, Senator Omtatah raised concerns that legal amendments affecting the LPG deal were quietly introduced through the Finance Bill without public participation. “The amendment was sneaked in public finance through the Finance Bill,” said Omtatah.

His concerns were shared by Senator Veronica Maina, who echoed calls for more clarity. “Since the report is not good enough according to Sen. Omtatah, then the Cabinet Secretary should seek leave and come up with more substantial answers,” she said.

In response to Senator Bonni Khalwale's query on government incentives for attracting LPG investors, EPRA Managing Director Daniel Kiptoo stated that all taxes on LPG cylinders were removed in the 2023/24 financial year.

Additionally, the Ministry faced criticism over Sh192.64 million spent by the Kenya Pipeline Company on early-stage studies such as environmental assessments and engineering designs before handing over the project. The officials, however, acknowledged that discussions on cost recovery were still ongoing.

Vice-chair William Kisang, meanwhile, defended the government, praising private sector engagement in the energy sector, noting, “The private sector is doing a good job in LPG as compared to what the government is doing.”