Lamu’s $17 billion oil refinery to expand into petrochemical complex      

David Ndii, chairperson of Kenyan President William Ruto’s Council of Economic Advisors, has disclosed that the planned Ksh2.2 trillion ($17 billion) Lamu oil refinery will be developed as an integrated petrochemical complex, expanding beyond fuel production into a wider industrial hub. 

Ndii said the project will not operate as a standalone refinery but will include additional facilities designed to process petroleum by-products into industrial materials used across manufacturing, agriculture and consumer industries. 

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

Refinery expands into petrochemicals

A conventional refinery mainly processes crude oil into products such as petrol, diesel, jet fuel and fuel oil. A petrochemical complex goes further by converting petroleum and natural gas derivatives into chemical products that serve as raw materials for other industries. 

The Lamu facility is expected to include plants that manufacture products such as polyethylene (PE), polyvinyl chloride (PVC) and polystyrene (PS), which are widely used in packaging, construction materials, pipes, household goods and industrial applications. 

The complex could also produce chemical inputs such as resins, polymers, solvents and methanol, supporting industries involved in paints, detergents, cosmetics, synthetic fibres and consumer goods. 

By creating a network of suppliers, manufacturers and service providers around the refinery, the project is expected to generate new business opportunities in logistics, storage, transportation and industrial production.

East Africa’s mega refinery advances

Ndii said the wider petrochemical complex could increase Lamu County’s gross domestic product by about Ksh322.9 billion ($2.5 billion), placing the coastal county among Kenya’s largest economic contributors. 

He added that the projected economic output would represent about a quarter of Kenya’s current manufacturing GDP, estimated at Ksh1.29 trillion ($10 billion), although the final impact could be higher as additional industries develop around the facility. 

The project is expected to support thousands of jobs directly and indirectly, with opportunities extending beyond refinery operations into construction, manufacturing, supply chains and support services. 

Kenyan President William Ruto recently confirmed that preparations for the refinery have reached an advanced stage, with a groundbreaking date expected after discussions with Africa’s richest man Aliko Dangote, the founder and CEO of Dangote Industries Limited. 

Ruto said the project could create about 60,000 jobs for young Kenyans and become one of the largest industrial investments in East Africa.

Lamu refinery to drive industrial growth

The refinery follows Dangote Industries’ decision to establish the facility in Lamu, ending uncertainty over whether the investment would be located in Kenya or Tanzania. 

The planned 700,000-barrel-per-day refinery is expected to become East Africa’s largest refinery and anchor industrial development along the Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) corridor. 

The LAPSSET corridor is a major infrastructure initiative designed to connect Kenya’s Indian Ocean coastline with South Sudan and Ethiopia through ports, railways, roads and energy infrastructure. 

The refinery and petrochemical complex are expected to strengthen Kenya’s position as a regional energy and manufacturing centre while reducing dependence on imported petroleum products. 

The project is part of the government’s broader plan to attract large-scale private investment, expand manufacturing capacity and create new industrial zones along the country’s coastline.