Nigerian billionaire Aliko Dangote has explained why his group settled on Lamu instead of Mombasa or Tanzania’s Tanga for a planned Ksh2 trillion oil refinery, citing the coastal town’s deep waters, available land and suitability for a major petroleum-processing facility.
Dangote said the idea for the refinery emerged during discussions with President William Ruto in Nairobi, where the two initially met to discuss fertiliser before their conversation expanded to Kenya’s potential for a large-scale refinery.
“That is how it all started,” Dangote said, recalling the Nairobi meeting.
According to the businessman, the location of the proposed refinery was not immediately settled. His group considered several sites in the region, including Tanga in Tanzania, which had initially appeared attractive because of plans to connect Uganda’s crude oil to the Tanzanian port.
“We are all thinking then of Tanga because of the pipeline between from Uganda into Tanga,” Dangote said.
The assessment, however, changed as Dangote’s team examined the physical requirements needed to establish a refinery capable of processing hundreds of thousands of barrels of crude oil daily.
The availability of adequate water, sufficient land and deep access to the Indian Ocean eventually placed Lamu ahead of the competing locations.
“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 decision places Lamu at the centre of one of Kenya’s most ambitious private-sector industrial projects, with the proposed refinery expected to become a major petroleum-processing facility serving Kenya and the wider East African market.
The Ksh2 trillion project is expected to have a processing capacity of up to 700,000 barrels of crude oil per day. Its groundbreaking ceremony is scheduled for September 30 in Lamu, with President Ruto expected to attend.
The refinery is planned as part of the wider Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) corridor, which is intended to establish Lamu as an important transport, logistics and trade gateway connecting Kenya to neighbouring countries.
The location could also allow the refinery to take advantage of maritime infrastructure and facilitate the movement of crude oil and refined petroleum products through the Indian Ocean.
Preparations for the project have already begun, with about 2,930 tonnes of heavy construction equipment reportedly arriving at Lamu Port ahead of the groundbreaking ceremony.
For Dangote, the decision to commit to the refinery reflects his group’s willingness to move quickly when it identifies an investment opportunity that meets its commercial requirements.
“One good thing about our own group,” Dangote 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 proposed refinery would be considerably larger than Kenya’s former refinery in Mombasa, which has not operated as a conventional crude-oil refinery for years.
If completed as planned, the Dangote facility would potentially transform Lamu into a major petroleum-processing hub, with refined products targeting Kenya and other markets across East Africa.
However, the scale of the project also presents significant challenges.
One of the major questions concerns the supply of crude oil. Kenya does not currently have commercial-scale crude production sufficient to meet the requirements of a refinery of the proposed capacity.
Potential feedstock could therefore come from countries such as Uganda and South Sudan, Kenya’s own future production, or international suppliers. Developing the infrastructure required to move crude efficiently to Lamu will be crucial to the refinery’s long-term operations.
The project is also facing a land dispute involving residents in Lamu. A Kenyan court has directed parties to maintain the status quo over disputed land pending a hearing scheduled for October 14, 2026. The court, however, did not grant an application seeking to halt the planned groundbreaking.
Despite the outstanding issues, Dangote’s explanation provides new insight into how Lamu emerged as the preferred site.
Rather than choosing the town simply because it was Kenya’s alternative to Mombasa or Tanzania’s Tanga, Dangote said the group assessed the locations against the practical demands of building and operating a large refinery.
The availability of deep waters, adequate land and access to the sea ultimately made Lamu the preferred location.
The proposed investment could significantly expand Kenya’s petroleum-processing and logistics ambitions while strengthening Lamu’s position as a strategic port under the LAPSSET corridor.
For Dangote, the choice was ultimately based on whether the location could support the physical and commercial demands of the massive refinery.
“That’s why we now decided not Mombasa, not Tanga, but Lamu,” he said.
