Taifa Gas’s Sh16 billion liquefied petroleum gas terminal at the Dongo Kundu Special Economic Zone is nearing completion, bringing Kenya closer to a major expansion in coastal LPG storage and import capacity. The facility is designed to hold 30,000 metric tonnes across 12 spherical tanks on a 30-acre site, with potential expansion to 45,000 tonnes.
The project could improve supply security and challenge concentration in the bulk import market. However, cheaper cooking gas is not automatic. Retail prices will still depend on international LPG costs, exchange rates, taxes, port and handling charges, inland transport, wholesale competition and dealer margins.
Key Overview
• The terminal’s initial storage capacity is 30,000 metric tonnes.
• It comprises 12 spherical tanks on approximately 30 acres.
• The reported investment value is Sh16 billion.
• Capacity could later expand to 45,000 metric tonnes.
• Kenya had 44,430 tonnes of installed LPG storage as of March 2025.
• Two import routes handled all recorded LPG imports in the second half of 2025.
• More capacity may lower logistical costs, but retail price reductions are not guaranteed.
Dongo Kundu Project Enters Its Final Stage
The Special Economic Zones Authority said the 30,000-tonne facility was nearing completion in July 2026, although it did not provide a confirmed commissioning date. The update followed an earlier projection that operations would begin around March or April after the project reached about 80% completion in January.
Construction began in 2023 but was slowed by legal and environmental disputes. By early 2026, the tanks were in their final construction phase, according to a site progress assessment that valued the investment at Sh16 billion.
The terminal is being developed by Taifa Gas Investments SEZ Limited and is associated with Tanzanian businessman Rostam Aziz. Its location near the Port of Mombasa is intended to support bulk imports, storage and onward distribution.
Capacity Addition Is Large Relative to Kenya’s Base
Kenya’s installed LPG storage capacity stood at 44,430 metric tonnes in March 2025, according to the regulator’s medium-term petroleum plan, which identified LPG as the petroleum product requiring additional storage.
Measured against that baseline, Taifa Gas’s initial capacity is equivalent to about 68% of the country’s then-installed capacity. The comparison is not an exact post-opening total because other facilities have since entered or expanded operations, but it shows the project’s scale.
The same plan projected LPG demand to rise from about 446,190 tonnes in 2025 to 588,900 tonnes in 2029. Additional storage can allow larger cargoes to be received, provide more operating flexibility and reduce the risk that limited tank space causes delivery delays or emergency purchases.
New Entrant Could Challenge Import Concentration
Kenya’s latest official data highlights how concentrated the import infrastructure remained before Taifa Gas opened. During July to December 2025, approximately 207.99 million kilograms entered through the AGOL jetty and 22.02 million kilograms through the Lake Gas jetty.
That translated into import-route shares of about 90% and 10%, respectively, according to the regulator’s 2025–2026 biannual statistics. Taifa Gas would therefore introduce another large-scale route into a market where two facilities handled all recorded imports during the period.
Competition could pressure terminal handling charges, give marketers more storage options and reduce dependence on one dominant facility during disruptions.
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What the Terminal Could Mean for Cooking Gas Prices
Greater storage can reduce some supply-chain costs. Importers may be able to order larger shipments, spread fixed costs over more tonnes and avoid demurrage or shortages caused by inadequate tank space. More terminal competition may also encourage better commercial terms.
Yet these savings will only reach households if they are passed through the wholesale and retail chain. Kenya’s LPG prices are market-driven rather than set through the monthly petrol, diesel and kerosene formula. The regulator’s consumer guidance on LPG pricing says it may intervene if evidence of market failure emerges.
Prices also remain exposed to international propane and butane benchmarks, the shilling’s exchange rate, taxes, financing costs, cylinder distribution and last-mile transport. The terminal could therefore moderate prices or reduce volatility without necessarily producing an immediate nationwide price cut.
Rising Demand Strengthens the Investment Case
LPG consumption increased 14.59% year-on-year to 251,425 tonnes during the second half of 2025, supported by clean-cooking programmes and household fuel switching. Continued demand growth means the new capacity could be absorbed.
The terminal could also serve regional transit markets. Mombasa already supports fuel flows to Uganda, Rwanda, Burundi, South Sudan and parts of the Democratic Republic of Congo, although actual LPG exports will depend on commercial demand, road transport capacity and cross-border arrangements.
The project has also been linked to the proposed Tanzania–Kenya gas pipeline. That pipeline, however, remains a separate regional proposal, so its future benefits should not be treated as part of the terminal’s immediate opening.
Completion Alone Will Not Determine Consumer Savings
The Dongo Kundu terminal can materially improve Kenya’s LPG infrastructure by adding storage, import choice and supply resilience. Its effect on household budgets will depend on how quickly it becomes operational, the fees it charges and whether competition lowers costs throughout the distribution chain.
The clearest near-term benefit may be a more reliable supply system with reduced dependence on one import route. Sustained price relief will require transparent terminal access, efficient inland distribution, strong competition and stable international market conditions.
Sources
Special Economic Zones Authority / Energy and Petroleum Regulatory Authority / Business Daily Africa / Pipeline & Gas Journal
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