The Government of Kenya has confirmed the collapse of negotiations for a KSh 2.5 billion liquefied petroleum gas (LPG) supply agreement with Saudi Aramco, a deal that was intended to improve access to affordable cooking gas in the country.
Energy Cabinet Secretary Opiyo Wandayi told a Senate energy committee that talks with the Saudi energy giant broke down after the government rejected proposed terms, including an arrangement that would have granted exclusive LPG supply rights to the company.
According to the ministry, Kenya declined to proceed with the agreement because the conditions were considered unfavourable and inconsistent with national energy policy objectives.
The proposed partnership had been linked to broader plans aimed at expanding Kenya’s LPG import and storage infrastructure, including discussions around a floating storage and processing facility near the Port of Mombasa to stabilize supply and improve affordability.
The collapse of the deal comes at a time when many households continue to face high cooking gas prices driven by global energy market fluctuations and domestic cost pressures.
Recent adjustments in the petroleum sector, including changes to the Petroleum Development Levy, are also expected to influence LPG retail prices in the coming months.
The Ministry of Energy now says it will shift focus toward private sector participation in developing LPG infrastructure. This includes issuing new tenders, attracting local partners, and expanding cylinder manufacturing and storage capacity.
Officials say Kenya’s long-term LPG strategy will continue to depend on global market trends, import capacity, and investment in domestic infrastructure aimed at improving energy security and affordability.
Further updates are expected as the government explores alternative partnerships to strengthen the country’s LPG supply chain.
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