Dangote Group says a Kenyan court order over a land dispute will not stop the groundbreaking ceremony for its planned 700,000-barrel-per-day oil refinery in Lamu, although the ruling could temporarily affect activities at the project site.
The company is scheduled to hold the groundbreaking ceremony on Wednesday as it advances plans for what would become one of Africa’s largest refining projects.
The development follows an order from Kenya’s Malindi Environment and Land Court directing that the existing “status quo” on the disputed land be maintained until a hearing scheduled for October 14.
The case was brought by 133 residents of Chandavai in Lamu County, who argue that the land earmarked for the refinery forms part of their ancestral heritage. They say their families have lived and farmed on the land for generations.
Dangote Group said the court had not halted the groundbreaking ceremony, but acknowledged that some activities at the site could be affected by the order.
The company said both parties are required not to undertake activities on the disputed land until the case is heard.
A Major Refining Ambition for East Africa
The proposed Lamu refinery represents a major expansion of Dangote’s refining ambitions beyond Nigeria and could significantly alter Kenya’s position in the regional petroleum market.
Dangote expects the project to cost between $15 billion and $16 billion, with completion targeted for 2030.
The refinery is planned to have a capacity of 700,000 barrels per day, matching the capacity of Dangote’s refinery near Lagos, Nigeria.
The Nigerian facility has helped reduce the country’s dependence on imported petroleum products while creating additional capacity for exports.
Kenya, however, has a different energy profile. Unlike Nigeria, which is sub-Saharan Africa’s largest oil producer, Kenya currently has no commercial oil production.
Land Dispute Puts Spotlight on Community Rights
The court case highlights one of the major challenges facing large infrastructure projects across Africa: balancing ambitious investment plans with community land rights.
The 133 residents challenging the project say the land is part of their ancestral heritage and has supported generations of families through farming and settlement.
The October 14 hearing could therefore become an important milestone in determining how the dispute affects the refinery's development.
For Dangote, the immediate challenge is to continue advancing the project while complying with the court's order.
A Bigger African Refining Strategy
The Lamu project comes at a significant moment for Dangote's energy business.
Earlier this month, the group launched an initial public offering for its Lagos refinery, described in the report as Africa's largest-ever share sale.
The proposed Kenyan refinery would give Dangote another major refining base and strengthen its ambition to build an energy business with a broader continental reach.
For now, Wednesday's groundbreaking is expected to proceed, but the October 14 court hearing could prove critical to the next phase of the Lamu refinery project.
Source: Reuters
