Lamu’s deep waters and availability of land have emerged as the key reasons Aliko Dangote’s group settled on the Kenyan port town for its planned Sh2 trillion oil refinery instead of Mombasa or Tanzania’s Tanga.
Dangote on Tuesday said his group examined potential sites in Kenya and Tanzania before concluding that Lamu offered the physical conditions required for a refinery of the planned scale. The project is expected to process up to 700,000 barrels of crude oil every day and supply petroleum products to Kenya and other East African markets.
The Nigerian billionaire said the refinery idea took shape during a meeting with President William Ruto in Nairobi. The two were initially discussing fertiliser supplies before the conversation turned to the possibility of investing in a refinery.
“That is how it all started,” Dangote said, describing the Nairobi meeting.
He said discussions continued after the meeting as his group considered where such a facility could be built.
Tanga was initially among the locations being considered, largely because of plans for a crude oil pipeline linking Uganda to the Tanzanian port.
“We are all thinking then of Tanga because of the pipeline between from Uganda into Tanga,” he said.
The group later carried out a wider assessment of the physical conditions needed for the refinery, leading to a change in the preferred location.
“But later on, the most suitable place that we realized that we can put up this refinery where they have enough water, they have depth in terms of the sea and good land is Lamu,” Dangote said.
“That’s why we now decided not Mombasa, not Tanga, but Lamu.”
The proposed Dangote East Africa Refinery is valued at about Sh2 trillion and is planned within the Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) corridor.
Its location will give the facility access to the Indian Ocean, with the project expected to support petroleum processing and logistics serving the wider region.
The groundbreaking ceremony is scheduled for September 30 in Lamu, and President Ruto is expected to attend.
Preparations for the project have already gained pace, with about 2,930 tonnes of heavy construction equipment arriving at Lamu Port ahead of the ceremony.
Dangote also explained how his group handles major investment decisions once it identifies a project it considers viable.
“One good thing about our own group,” he said, is that “if we see something that is real, that is good, I can make a commitment on behalf of the board. I’ll go later and clear myself.”
The planned refinery would be far bigger than Kenya’s former refinery in Mombasa and is expected to supply fuel to the local market as well as other countries in East Africa once completed.
However, access to crude remains one of the issues surrounding the project. Kenya does not currently produce oil at commercial scale, meaning the refinery could depend on crude from Kenya, Uganda, South Sudan and international sources.
Developing the infrastructure needed to bring that crude to Lamu will therefore be an important consideration.
The project is also caught up in a land dispute involving residents in Lamu. A Kenyan court has ordered the parties to maintain the status quo over the disputed land until a hearing on October 14, 2026.
The court, however, did not grant a request to stop the planned September 30 groundbreaking.
Dangote’s explanation provides a clearer picture of why Lamu was selected after the group considered competing locations. The decision was based on the site’s sea access, water depth, land availability and other requirements for a refinery intended to serve markets beyond Kenya.
The investment is expected to place Lamu at the centre of efforts to expand petroleum processing and logistics along Kenya’s Coast while strengthening its potential role in serving the wider East African market.