Kenya Pipeline Company (KPC) has signed a 3-year lease agreement with Kenya Petroleum Refineries Limited (KPRL) as it looks to expand the country’s oil storage capacity, Procurement & Logistics Online reported.

According to Citizen TV, the move to lease comes after a tussle between the two state agencies that slowed down the acquisition process.

The country’s Ministry of energy had initially wanted KPC to acquire the KPRL facilities and convert it into an oil storage facility as Kenya gears up for commercialization of its crude oil.

However, in the new lease agreement, the two companies will work in partnership with expected development of the current and new infrastructure.

The plan is to use KPRL to increase the country’s oil storage capacity as well as set aside a portion to handle the crude oil from Turkana before export.

Energy Cabinet Secretary, Charles Keter, said that the new deal will see Kenya Pipeline and KPRL invest in an liquefied petroleum gas (LPG) handling facility on the refinery’s grounds.

“The government is looking to invest in LPG facilities on KPRL’s grounds with over 309 acres of land available at its Changamwe facility,” he added.