The government is considering listing Kenya Pipeline Company (KPC) on the Nairobi Securities Exchange (NSE) through an Initial Public Offering (IPO) to boost its liquidity and expansion.
National Treasury Cabinet Secretary John Mbadi made the announcement on Thursday, February 6, during an event at KPC’s headquarters in Nairobi, where the company presented a Ksh3 billion interim dividend to the government.
Mbadi noted that going public would provide KPC with the capital needed to expand operations, particularly in regional markets and Liquefied Petroleum Gas (LPG) infrastructure. He compared the move to successful listings of companies like Safaricom and KenGen.
“We believe KPC stands to gain significantly from listing on the NSE. It will provide much-needed liquidity for expansion and give Kenyans a chance to own a stake in the company,” said Mbadi.
One of KPC’s major upcoming projects is the establishment of a petroleum trading hub in Mombasa to enhance the receipt, distribution, and trading of fuel. The initiative aims to strengthen Kenya’s position in the regional oil and gas industry.
KPC currently controls 90% of fuel transportation to Uganda and is working to expand its reach into Rwanda. The government sees listing on the NSE as a critical step in maintaining KPC’s competitiveness in the regional energy sector.
Mbadi also announced plans to wind down Kenya Petroleum Refinery Limited (KPRL) and merge it with KPC. He acknowledged delays in the process but assured that the National Treasury and the Ministry of Energy would finalize the transition within the current financial year. The merger is expected to enhance efficiency in Kenya’s energy sector.
KPC’s Financial Performance
KPC Director General of Public Investments and Portfolio Management, Lawrence Kibet, highlighted that the Government-Owned Enterprises (GOE) Bill 2024, currently under review by the Attorney General, seeks to improve governance in state-owned firms. The bill aims to reduce bureaucratic hurdles, allowing public enterprises to operate more efficiently and generate higher returns.
KPC has contributed Ksh63 billion in tax and dividends over the past decade. In the 2023-24 financial year, the company posted a profit before tax of Ksh10.1 billion, up from Ksh7.6 billion the previous year.