The planned construction of a massive oil refinery in Lamu by Africa’s richest man, Aliko Dangote, could transform Kenya’s northern coast into a major energy and logistics hub while giving fresh momentum to the long-delayed Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) Corridor.

Dangote has announced that construction of the proposed 700,000-barrel-per-day refinery is expected to begin by October, with the investment now estimated at $16 billion (nearly Sh2 trillion).

“By October this year, we will be groundbreaking. Once we break the ground, we will begin the construction,” Dangote told the BBC.

The project is expected to take less than four years to complete and would be among the largest oil-processing investments in Africa. Dangote has said the refinery will serve Kenya and the wider East African market, potentially reducing the region’s dependence on imported refined petroleum products.

“The refinery will not only be for Kenya but East Africa as a whole, so it can serve a lot of countries, including Egypt,” he said.

For Lamu, the significance of the project extends beyond oil refining. The refinery could provide the industrial anchor that LAPSSET has long needed to generate sustained cargo flows and investment around the corridor.

Lamu Port is a central component of LAPSSET and currently has three operational berths. The Kenya Ports Authority ( KPA) says the port has an eventual capacity of 23 berths and is designed to handle containerized, conventional, and petroleum cargo.

The refinery will create demand for crude oil handling, petroleum storage, pipelines, tank farms, shipping services, and road transport, strengthening the port’s role as an energy gateway.

Dr William Kalomba, an energy expert at the University of Nairobi, said a refinery of this scale would have important implications for Kenya’s energy security because it would bring a significant refining capacity closer to the East African market.

“It could reduce exposure to disruptions in international refined-fuel supply and give Kenya greater flexibility in securing petroleum products. The key, however, will be ensuring that the refinery is integrated with adequate storage, pipelines, port infrastructure, and regional distribution networks.”

The project could also change the economics of LAPSSET by creating a major source of industrial traffic along the corridor. The original LAPSSET plan envisaged an integrated network linking Lamu with South Sudan and Ethiopia through roads, railways, pipelines, an oil terminal, refinery, and other infrastructure.

A large refinery at the coastal end could therefore stimulate investment further inland, including petroleum depots, logistics parks, warehouses, trucking facilities, and manufacturing industries.

The benefits could extend to neighbouring countries if the facility supplies refined products across the region. Recent reporting has described the proposed refinery as a potential boost to LAPSSET and a way of strengthening Kenya’s position as a regional energy and logistics hub.

For consumers, the biggest potential benefit would be improved security of fuel supply. Kenya and other East African economies currently rely heavily on imported refined petroleum products, leaving them exposed to international price movements, shipping disruptions, and geopolitical shocks.

Dangote’s investment comes as his Nigerian refinery expands its role in supplying African markets. The Lagos facility, currently operating at 650,000 barrels per day, is being expanded as part of a wider strategy to reduce Africa’s dependence on imported fuels.