Page 6 - AfrOil Week 36 2019

AfrOil COMMENTARY AfrOil
 The Entebbe Jetty is being developed at a total cost of around $270mn and is expected to deliver fuel to Rwanda, Burundi, Uganda, north- ern Tanzania and eastern Congo (Brazzaville).
Similar story
While home to significant gas reserves, Mozam- bique is yet to build out its downstream sector. Over the past few years, there has been talk of developing a 350,000 bpd oil refinery by Oilmoz in collaboration with China National Petroleum Corp. (CNPC), though a project of such scale was never likely to be realised.
However, as the country’s LNG industry begins to grow legs, use of gas as a feedstock for fuels and other products is a far more viable solution.
Indeed, Portugal’s Galp Energia announced plans last week to invest $138.7mn in logistics to expand its fuel storage capacity in Mozambique.
Paulo Varela, Galp’s administrator in Mozambique, said that bases would be built in Beira and Matola for LPG storage and onward transportation to Botswana, Congo (Brazza- ville) and Zimbabwe, adding that the facilities would offer “greater security and reliability” of LPG supply.
During a meeting with Portugal’s Deputy Economy Minister Pedro Siza Vieira he said that the Matola terminal would “enhance the use of port and rail facilities to the benefit of Mozambique”.
The new units will give Galp four logistics hubs in the country as well as 120 fuel stations. In the first quarter of this year, several com-
panies expressed their interest in building a products pipeline from Beira in Mozambique to Zimbabwe’s capital Harare to enhance fuel supply security.
The pipeline is estimated to cost more than $1bn and has been in the works since 2014 but little progress has been made, as the plan is still being evaluated in Harare.
Zimbabwe has sought greater investment because the landlocked country has faced severe shortages of petroleum products, partly caused by transport constraints and scarcity of foreign exchange required to finance imports, leading to long queues at fuel stations.
Around 90% of fuel used is piped through the Beira-to-Feruka pipeline, which is operated by Mozambique’s CPMZ Holdings.
Focus on security of supply
Meanwhile, fuel shortages have also been reported in Madagascar, where OMH, the local hydrocarbons agency, recently announced a new strategy for the supply and distribution of fuel across the island.
Northern Madagascar has suffered from shortages because of contract negotiations between tankers and marketers.
In a statement, OMH director-general Lau- rent Rajaonarivelo said that during periods of peak demand, it was “imperative” to take steps to strengthen distribution capabilities to areas with high tourism rates. He noted that this care and forethought was particularly important with the upcoming visit of the Pope.
Rajaonarivelo added that the measures put in place had reduced the supply risk without increasing prices at the pump.
In late July, Kenya’s National Lands Com- mission (NLC) started surveying the route of the Lokichar-Lamu pipeline, the oil conduit element of LAPSSET, following the completion of front-end engineering design (FEED) on the project. ™
INVESTMENT
State-owned Zimbabwean firm seeks larger share of domestic fuel market
ZIMBABWE’S Petrotrade, a state-owned retail sellerofpetroleumproducts,revealedlastweek that it was gearing up to launch an expansion campaign in rural areas.
Godfrey Ncube, the acting CEO of Petro- trade, said the campaign aimed to bring Petro- trade’s share of the domestic fuel market up from the current level of 10%. The company is looking to gain a much larger market share, and it hopes to do so by boosting rural sales, he said.
“The future plan is to grow the company. We want to be the company that supplies fuel to dif- ferent parts of the country,” he told The Stand- ard in an interview published on September 8. “Our aim is that probably in the next three or so years, Petrotrade is there in every district in
Zimbabwe. We want to ensure that we are oper- atingineverydistrict,evenintheruralareas.”
To this end, Ncube said, the company is working to build four new filling stations and will soon begin work on a fifth facility. “We have a project in Mabvuku (Harare) that is almost finished, [and] we have got one at War- ren Park (Harare),” he said. “We have got a project in Bindura that is about 35% complete, [and] we also have a project in Masvingo that is running at about 30% or so complete. We also have a project that is about to start at Epworth (Harare).”
He acknowledged that Petrotrade was trying
to expand its market share at a time when fuel
demand is lower than usual. 
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w w w . N E W S B A S E . c o m Week 36 10•September•2019