Tanzania’s Taifa Gas is completing a large liquefied petroleum gas import terminal at the Dongo Kundu Special Economic Zone near Mombasa. The project has entered final testing and installation work, bringing it closer to commercial operations after construction delays linked to a legal challenge.
The terminal will initially store 30,000 metric tonnes of LPG across 12 pressurised spherical tanks, with the site designed for expansion to 45,000 tonnes. Once commissioned, it is expected to become East Africa’s largest LPG storage terminal and introduce a third major operator into Kenya’s highly concentrated bulk-import market.
Key Overview
- Hydrostatic testing of the storage tanks is underway ahead of final regulatory approval.
- The 30-acre facility will initially hold 30,000 metric tonnes of LPG.
- Kenyan reporting values the project at approximately KSh16 billion, equivalent to about TSh320 billion.
- Taifa Gas expects the terminal to connect Mombasa with its Dar es Salaam and Zanzibar operations.
- The facility could challenge a market in which AGOL and Lake Gas handle more than 98% of Kenya’s imported LPG.
Final Testing Brings Commissioning Closer
The Dongo Kundu project has reached its final phase, with engineers conducting hydrostatic tests on the terminal’s pressurised storage vessels. The tests are being witnessed by inspectors from Kenya’s Energy and Petroleum Regulatory Authority, the Kenya Bureau of Standards and other agencies before operational approval can be granted.
Taifa Gas site manager Anthony Musyoka said tank construction had been completed, while electrical systems, instrumentation, pipelines and the marine connection were moving through their final stages. According to the latest project update, all pipeline materials had been delivered and contractors remained on site.
Government officials have indicated that operations could begin within three months, although the company has not publicly announced a firm commissioning date. Earlier timelines had also shifted, making completion of the remaining technical tests and approvals the clearest near-term milestone.
Currency Clarification on the Project’s Value
The project has been described as a Sh320 billion investment in Tanzanian coverage. Because the terminal is located in Kenya, that figure can be misread as Kenyan shillings. Kenyan reporting has consistently described it as a KSh16 billion project, equivalent to roughly TSh320 billion and about $124 million to $130 million, depending on the exchange rate and reporting date.
This makes the terminal one of the largest private investments inside the Dongo Kundu Special Economic Zone. Its 30,000-tonne initial capacity will exceed AGOL’s reported 25,000-tonne facility in Shimanzi and Lake Gas’s 10,000-tonne terminal in Vipingo.
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New Competition for Kenya’s LPG Import Market
Kenya’s bulk LPG import market is currently dominated by African Gas and Oil Company and Lake Gas. Official data cited in market reporting shows that AGOL handled about 208 million kilogrammes of imported LPG in the six months to December 2025, while Lake Gas handled about 22 million kilogrammes.
Together, the two operators accounted for more than 98% of imports for local consumption. Taifa Gas’s entry could reduce dependence on the existing terminals and create more competition in vessel handling, storage and wholesale supply.
The new terminal is designed to receive large LPG carriers directly through a marine connection. Larger cargoes can reduce shipping costs per unit, while dedicated storage could limit Taifa Gas’s reliance on third-party import infrastructure. Any savings reaching consumers, however, will also depend on global LPG prices, taxes, inland transport and competition among distributors.
Mombasa Joins a Three-Port Regional Network
Taifa Gas already operates import terminals in Dar es Salaam and Zanzibar. Adding Mombasa would create a three-port network along East Africa’s Indian Ocean coastline, allowing the company to redirect supplies when one market faces shortages.
Chairman Rostam Aziz said the arrangement could move LPG between Mombasa, Dar es Salaam and Zanzibar while supporting larger consolidated purchases from international suppliers. This would replace part of Taifa Gas’s existing dependence on transporting cylinders into Kenya by road.
The regional network strategy could also make Mombasa a distribution point for neighbouring countries, although actual export volumes and destination markets have not yet been disclosed.
Legal Clearance Revived Construction
Construction was delayed after residents challenged the project’s environmental and safety approvals. In November 2025, the Environment and Land Court struck out the petition, clearing the way for work to continue.
The facility’s progress has since been highlighted by the Special Economic Zones Authority, which says the terminal will expand Kenya’s LPG storage capacity and strengthen market competition.
Taifa Gas is also broadening its position across the energy value chain. In April 2026, it agreed to acquire a 49% stake in PanAfrican Energy, whose Tanzanian operations include the Songo Songo natural gas project.
The immediate test, however, is whether the Dongo Kundu terminal completes commissioning safely and begins operating at scale. If successful, it could reshape Kenya’s import structure, strengthen regional supply resilience and establish Mombasa as a more important LPG logistics hub.
Sources: The Citizen / Business Daily Africa / Nation Africa / Special Economic Zones Authority / Eastleigh Voice
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