Page 13 - DMEA Week 29 2021

DMEA FUELS DMEA

URC carries out Lake Victoria fuel trial

AFRICA UGANDA Railways Corp. (URC) completed a about 185mn litres per month of fuel. Wakasenza
trial shipment of petroleum products via Lake added that the rail route would be able to handle
Victoria last week, marking the first use of the an initial 10-20mn litres per month of petro-
route in 16 years. leum products, with volumes rising eventually
Stephen Wakasenza, the acting managing to 40mn litres per month, assuming that URC
director of state-owned URC, told Bloomberg acquires a sufficient number of rail tank cars.
that his company had received 500,000 litres of He also indicated that the state-run railway
fuel in the trial shipment. The petroleum prod- operator was looking to expand its capacity to
ucts were delivered to Dar es Salaam, the largest transport petroleum products by water across
city in Tanzania, and then transported by rail to Lake Victoria. Currently, he said, URC has one
Mwanza, a port on Lake Victoria, before being vessel capable of holding 880 tonnes and making
moved across the lake to Uganda, he said. 10 voyages per month and is repairing a second
Wakasenza explained that URC had carried vessel of the same capacity. It also has access to a
out the trial shipment in a bid to open up a new Kenyan boat that can transport around 4-6mn
delivery route for refined fuels. Uganda imports litres per month of fuel, as well as a Tanzani-
nearly all of its petroleum products via Kenya an-registered ship known as the Umoja, he said.
by road and pipeline and is eager to diversify, he Kenya has also sought to use Lake Victoria
said. as a delivery route for petroleum products, with
“We are comfortable with Mombasa, but as a state-controlled Kenya Pipeline Co. (KPC) using
country we need an alternative route for strategic a specialised ship to transport rail tank cars full
reasons,” he told Bloomberg. “We are targeting of fuel across the lake to destinations in Tanzania
oil because it is a product used daily.” and Uganda. The company conducted a dry-run
John Friday, Uganda’s assistant commis- test of this route in 2010, as well as a wet-run test
sioner for petroleum supplies, noted that the that involved the transfer of petroleum products
East African country was currently consuming from Kisumu to the Ugandan port of Jinja.™
PIPELINES

Abuja seeks funding for AKK pipeline

AFRICA NIGERIA’S federal government is looking for a As of press time, the Reuters report could not
new source of funding so that Nigerian National be confirmed. BOC declined to reply to the news
Petroleum Corp. (NNPC) can continue work on agency’s request for comment, saying it could
the Ajaokuta-Kaduna-Kano (AKK) natural gas not disclose information on specific loan agree-
pipeline project. ments, while Sinosure and Nigerian government
State-controlled NNPC had previously agencies did not respond to inquiries.
arranged to cover most of the costs of the $2.8bn For its part, NNPC declined to comment
project with $1.8bn worth of loans from the directly but stated that it was continuing nego-
Bank of China (BOC) and China Export & tiations with the Chinese lenders. “There’s no
Credit Insurance Corp. (Sinosure). However, cause for alarm,” a spokesman for the company
sources close to the matter told the Chinese told Reuters.
lenders were not disbursing the funds as quickly The AKK pipeline will pump gas from fields
as anticipated. in the southern part of the country to new
More specifically, the sources said, BOC and domestic customers, including thermal power
Sinosure have indicated that they are not willing plants (TPPs) with a combined generating
to release funds before the end of the summer, as capacity of 3,600 MW and petrochemical pro-
previously agreed. As a result, they said, work on ducers that use gas as feedstock. As such, it is a
the pipeline is falling behind schedule. key component of the Nigerian government’s
NNPC has responded by seeking to borrow domestic gasification strategy.
money from export credit agencies (ECAs) and NNPC and its contractors began building
other financial institutions so that it can proceed the pipeline along a 614-km route that runs
with construction, they stated. They did not northward from the left bank of the Niger river
name any potential new lenders. in Kogi State to the capital city of Kano State in
According to one of the sources, BOC and June 2020. When finished, the pipe will be able
Sinosure are delaying the release of loan funds to carry 99.11mn cubic metres per day of gas, or
because of concerns about risk, especially in light approximately 36.175bn cubic metres per year.
of other Chinese credits offered to Nigeria. “They Initially, throughput will amount to around
are looking at Nigeria as one loan, and right now 56.64 mcm per day, or around 20.67 bcm per
they feel they are too exposed,” the source said. year.™

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