Aliko Dangote says his company has bought a 25% stake in Kenya Pipeline Company, the network that carries imported fuel from Mombasa to Nairobi and inland markets, deepening his push into East Africa’s oil and gas sector.
The Nigerian billionaire announced the deal Wednesday at the Financial Times Africa Summit in London. “We bought 25 percent of their pipeline network for the distribution of petroleum products,” he said.
Kenyan President William Ruto had said a day earlier that private investors acquired a 25% stake in the pipeline network from public entities, though he did not name the buyers.
What the stake is reported to cost
Reports put the price at about $327 million for a 24.76% holding, roughly 42.5 billion Kenyan shillings, though Dangote’s remarks in London did not give a figure.
Reports do not say whether the shares came from the government, other public bodies or the market, and the exact stake is given as both 25% and 24.76%.
Where the deal fits
Kenya sold a 65% stake in the pipeline company in an initial public offering earlier this year, its first major share sale in two decades, and kept 35%. The offer was priced at 9 shillings a share and aimed to raise about 106.3 billion shillings, or roughly $825 million.
The company operates fuel pipelines, storage and distribution infrastructure linking the port of Mombasa to Nairobi and inland markets, making it central to regional fuel supply.
The deal follows Dangote’s $16 billion refinery project in Lamu, where he and Ruto broke ground last month on a plant designed to process 700,000 barrels of crude a day. The refinery is expected to take 40 months to build.
Dangote said at the time that Africa should stop exporting raw materials and start selling finished products. In London, he said his group could supply at least 20% of the jet fuel consumed by Europe and the United Kingdom.
Kenya is also considering taking an equity stake in the Lamu refinery, according to reports, which would make the government both a seller of pipeline shares and a possible partner in Dangote’s plant.
What it means for Nigeria and Kenya
Nigeria’s Dangote Industries is expanding well beyond its home market. The group’s Lagos refinery has a capacity of 650,000 barrels a day, and its owner says he wants to supply fuel and petrochemicals across Africa and to Europe.
Kenya gains a new private shareholder in the pipeline who could bring capital and a possible supply link to a nearby refinery. The same investor plans to compete in that fuel market, which raises questions regulators will want answered.
Open access rules, tariffs and priority for rival suppliers will decide whether the stake helps Kenya’s fuel supply or simply favors one shipper.
Dangote built his fortune in Nigeria on cement, sugar and fertilizer before he turned to refining. Buying into a pipeline in Kenya shows the next big stage of that strategy: owning not just the refinery but the pipes that carry its fuel to customers across the region.
