AEC backs Dangote’s planned Kenya refinery amid land court dispute

The African Energy Chamber (AEC) has backed Aliko Dangote’s planned 700,000-barrel-per-day (bpd) refinery in Lamu, Kenya, after a court order temporarily restricted activities on land earmarked for the project. In a September 29 press release, the AEC said the refinery could strengthen East Africa’s fuel security and urged the parties to resolve the dispute without prolonged delays.

The Malindi Environment and Land Court issued an interim order after 133 residents of Chandavai petitioned over land allocated to the $15-16bn refinery. The residents claim that LR No. 13061 forms part of their ancestral land and are seeking recognition and compensation. The court ordered parties to maintain the status quo and refrain from activities until a hearing on October 14. However, the order did not prevent the refinery’s September 30 groundbreaking, which went ahead with President William Ruto, Aliko Dangote and other officials attending, as reported by Reuters.

The AEC said land rights, compensation and environmental concerns should be addressed under Kenyan law but argued that the dispute should not hold up the project indefinitely.

“Africa cannot continue exporting its energy security and then acting surprised when conflicts thousands of kilometres away determine what our people pay for fuel,” said NJ Ayuk, executive chairman of the AEC. “The communities of Lamu must have their rights respected, and legitimate questions around land and compensation should be resolved quickly and fairly. But those issues cannot become an excuse to indefinitely delay one of the most important downstream investments East Africa has seen in decades.”

Kenya has relied heavily on imported fuel since its last refinery shut in 2013. According to the AEC, about 90% of East Africa’s fuel needs are met through imports and 75% of those supplies come from the Middle East. Disruption to global oil trade has increased concerns over the region’s exposure to external supply shocks.

The proposed refinery is modelled on Dangote’s 650,000-bpd facility in Nigeria, which the AEC said has helped reduce petroleum imports, increase refined-product exports and establish Nigeria as a regional refining hub. The Nigerian refinery is being expanded towards 1.2mn bpd. Dangote Industries has reaffirmed its commitment to the Lamu refinery project, which Dangote hopes to complete by 2030.

“Aliko Dangote has already demonstrated what African capital and African entrepreneurship can achieve in refining. Kenya now has an opportunity to build that same resilience in East Africa. Resolve the dispute, protect the communities and build the refinery,” Ayuk said.

In Africa, disputes over major energy infrastructure have also affected projects such as the East African Crude Oil Pipeline (EACOP) and West African Gas Pipeline (WAGP). The chamber argues that the Kenya refinery should not face similar prolonged delays as now is the time to build, invest and secure East Africa’s energy future.

According to the NewsBase Horizon analyst team, Kenya’s challenge is to strengthen fuel security while creating the legal and investment conditions needed to deliver major energy infrastructure without leaving legitimate community concerns unresolved. The proposed Lamu refinery could reduce the country’s dependence on imported refined products, but its progress will depend on resolving the land dispute, maintaining investor confidence and ensuring that future projects can move through a clear and predictable regulatory process.