Nigerian billionaire Aliko Dangote has acquired a 25% stake in Kenya Pipeline Company for about USD 327 million, expanding his energy business into East Africa’s petroleum distribution infrastructure as he pursues plans for a major refinery in Kenya.
Dangote announced the acquisition at the Financial Times Africa Summit in London on Wednesday, saying his company had bought a quarter of the pipeline network used to transport petroleum products.
He did not identify which company within his business group made the purchase. Reuters reported the announcement on Wednesday.
The transaction involves about 4.5 billion shares in Kenya Pipeline Company, representing 24.76% of its issued shares.
The block was traded on the Nairobi Securities Exchange on Monday for 42.5 billion Kenyan shillings, equivalent to approximately USD 327 million.
The acquisition gives Dangote a significant position in a critical part of Kenya’s energy supply chain, connecting his refining ambitions with infrastructure that moves fuel from the coast to domestic and regional markets.
“We bought 25% of their pipeline network for the distribution of petroleum products,” Dangote said, according to Bloomberg, as reported by Business Daily Africa.
Expanding beyond refining
The purchase forms part of a broader strategy to build an integrated energy business spanning refining, storage, and distribution across Africa.
Dangote Industries operates a major refinery near Lagos, Nigeria, with a capacity of about 650,000 barrels per day, according to published reports. The facility has positioned the group as a significant player in the continent’s petroleum market, with ambitions to supply markets beyond Nigeria.
Dangote said he planned to invest USD 1.5 billion to expand Kenya’s pipeline network, according to the Financial Times.
The proposed spending would strengthen the infrastructure available to transport refined petroleum products across East Africa and support the region’s growing demand for fuel.
Kenya Pipeline Company operates a network stretching about 1,300 kilometers, carrying petrol, diesel, and jet fuel from the port of Mombasa to inland depots and markets. Its infrastructure also supports supplies to neighbouring countries, including Uganda, South Sudan, and Rwanda, making it important for regional fuel distribution.
An expanded network could help improve transportation capacity and storage links as regional demand grows.
It could also give Dangote’s wider energy business a stronger position in moving petroleum products to customers across several markets.
A refinery planned for Lamu
The investment comes as Dangote advances plans for a new refinery at Lamu, on Kenya’s Indian Ocean coast.
The proposed facility is designed to process 700,000 barrels of crude oil per day, putting it on a scale comparable with his Nigerian refinery. The project is expected to require investment running into tens of billions of dollars, although published estimates vary.
Dangote and Kenyan President William Ruto broke ground on the project in September. Dangote has said initial work is under way and that a legal dispute involving land will not derail the development.
The project’s timetable and final financing arrangements remain important factors to watch.
The refinery could reduce the region’s dependence on imported refined fuels and provide a major new source of supply for East African markets.
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Its commercial success, however, will depend on financing, construction costs, access to crude oil, logistics, and the ability to compete with existing suppliers.
Combining refining capacity with access to pipelines and storage could give Dangote greater control over the journey from processing crude oil to delivering finished products. It could also create opportunities to serve customers in markets beyond Kenya.
Kenya’s privatisation debate
The acquisition follows Kenya’s sale of a majority stake in Kenya Pipeline Company through an initial public offering earlier this year.
The government sold 65% of the company’s shares, with trading on the Nairobi Securities Exchange beginning in March. The sale was part of efforts to raise funds and broaden private-sector participation in state-linked businesses.
However, the subsequent transfer of a large block of shares has attracted political scrutiny.
Kenyan opposition lawmaker Ndindi Nyoro has questioned the sale, arguing that state-linked institutions bought substantial holdings during the initial public offering (IPO) before some of those shares were transferred to a private investor. He has called for greater disclosure of the transaction.
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President Ruto has welcomed the sale of the stake to a private investor as a sign of confidence in Kenya’s capital markets.
Following the transaction, the government retains a 35% holding in the company, while the National Social Security Fund and Uganda National Oil Company remain significant shareholders.
The transaction therefore brings both commercial opportunities and questions about transparency, ownership, and the management of strategic infrastructure.
Building a continent-wide energy network
Dangote’s move into Kenya reflects his ambition to expand beyond his established businesses in cement, fertiliser and refining into a wider network of African energy assets.
The pipeline investment could support that strategy by giving his group a stake in the infrastructure used to move fuel across East Africa.
His planned refinery in Lamu would add a potential source of supply, while investment in storage and distribution could help connect production with regional markets.
The broader opportunity is significant: many African economies remain dependent on imported refined petroleum products, while transport and storage infrastructure can constrain the movement of fuel between markets.
Yet the strategy carries substantial financial and execution risks.
The refinery will require considerable capital, and expanding pipelines involves construction costs, regulatory approvals, and coordination with governments and existing infrastructure operators.
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For Kenya, the deal could bring new investment into a key energy network.
For Dangote, it represents another step towards building an integrated petroleum business that stretches beyond Nigeria and across the continent.
The success of that strategy will depend on whether the combination of refining, pipelines, and distribution can deliver reliable supplies and competitive costs while generating sustainable returns.