How Middle East oil crisis led to Ksh.2 trillion Dangote refinery in Lamu: Ruto reveals

President William Ruto has detailed how the Ksh.2 trillion Dangote East Africa Oil Refinery in Lamu County came to be, saying the project was conceived as part of efforts to shield Kenya and the wider region from disruptions in the global oil supply chain.

Speaking to the media on Thursday evening at State House, Mombasa, a day after the groundbreaking ceremony in Lamu, Ruto said the idea gained momentum after Kenya experienced challenges in accessing fuel during disruptions linked to tensions in the Middle East.

“Huu ni mradi ambao nilifikiria kwa muda. Na kwa sababu tulianza kupata changamoto hapa ya mafuta wakati matatizo yalitokea kule Middle East, Iran ilipopata shida, kuna sehemu inaitwa Strait of Hormuz,” Ruto said.

“Hatukuaki tuwe na matatizo ya kila mara bila ya kutafuta mbinu za kuyatatua, ili tusije wakati mwingine tena tukaingia katika shida hiyo hiyo."

Despite having been thinking about the idea way earlier, Ruto said he subsequently sent officers from his office to meet Dangote and visit one of his refineries, after which they advised that further research was needed before the project could proceed.

“So, wakati nilifikiria vile tutafanya, vile mlisikia, nikatuma officers kutoka ofisi yangu wakaenda kumtembelea Bwana Dangote. Wakaona ile refinery, wakarudi, wakasema kuna utafiti lazima ufanywe,” he said.

The President said he also engaged Ugandan President Yoweri Museveni and Tanzanian President Samia Suluhu Hassan on the need for the refinery, as discussions on its location began.

Ruto said Tanga in Tanzania was initially considered as a possible site because Uganda had planned to transport its crude oil through a pipeline to the Tanzanian port.

“Utafiti wa kwanza ukasema pengine ijengwe Tanga. Na kwa sababu ni kiwanda ambacho kinatushughulikia sisi wote na tayari crude oil kutoka Uganda ilikuwa iende Tanga, tukaona pengine pale itakuwa sawa,” he said.

However, subsequent studies involving Dangote and Kenyan officials identified Lamu as a more suitable location, with Ruto citing the depth of the sea as one of the reasons.

“Lakini utafiti mwingine ulipofanyika na huyu mwekezaji mwenyewe, na officers wetu wakashirikiana, mwisho ikaonekana ni vizuri ijengwe Lamu,” Ruto said.

“Na ikajengwa Lamu. Sababu kubwa ya Lamu kujengwa ni kwamba pale Lamu bahari iko na draft nzuri. Depth ya pale ni nzuri kwa sababu ile meli ambayo itakuwa inabeba mafuta ni nzito.”

Ruto said his meeting with Dangote in Nairobi later helped advance the project, explaining that the Nigerian businessman attended the ‘Africa We Build Summit’ hosted in Nairobi.

“Sasa nikamuuliza, (Dangote) tunataka ujenge kiwanda cha kusafisha mafuta hapa Kenya,” he said. "Ndiyo sasa majadiliano yakaendeshwa tangu hiyo April. Na jana tukafika pale Lamu kuanzisha kiwanda kile."

The President said the refinery is expected to create jobs and attract investment while supporting the development of industries linked to petroleum processing.

“Kiwanda hicho ni kiwanda cha muhimu sana. Itatupatia nafasi za ajira. Itatupatia nafasi za uwekezaji. Itatupatia nafasi za biashara. Itatupatia nafasi nyingi; viwanda nyingi. Viwanda vya plastiki, viwanda vya petrochemicals,” he said.

Ruto said Dangote had previously invited him to visit his refinery in Lekki, Lagos, describing it as a large industrial complex that had been developed on about 7,000 acres, noting that the government had already set aside 9000 acres for the project in Lamu.

“So, hapa Kenya tayari tumepata ardhi ekari elfu tisa. Tunataka tuongeze zingine elfu tatu ndiyo tujenge refinery, lakini pia tuwe na Special Economic Zone ambayo sasa itakuwa ekari kama elfu tano,” he said.

According to the Head of State, the development would transform the area into a major industrial centre, with benefits expected for the national economy and residents of the Coast region.

“So, pale kutakuwa na city kubwa sana na uchumi wa taifa letu utaridhika, uchumi ya watu wapwani utaimarika na uchumi ya watu wa Lamu vilevile utainuka,” Ruto said.

Ruto further described the refinery as a major investment, claiming that its value was equivalent to 12% of Kenya’s Gross Domestic Product (GDP).

“Ukipima katika mizani ya GDP, it is 12% of our GDP. Yaani, ule utajiri wote tulio nao Kenya, 12% ni kiwanda kimoja,” he said.

He also said the project would significantly boost Kenya’s Foreign Direct Investment (FDI), noting that the FDI had risen from USD 1.6 billion when he assumed office to USD 3.1 billion in 2025.

“Hiki kiwanda kitainua hii Foreign Direct Investment. Itafikia between 6 and 7 billion dollars next year, na hivyo hivyo the next year, kwa miaka minne mfululizo, our FDI is going to be around 6 or 7 billion dollars,” he said.

“It will be almost five times what we have in Kenya for the last many years. So, it's a very important piece of infrastructure. Na nimefurahi sana kwamba imewezekana sisi kuwa na kiwanda kile."