Page 9 - DMEA Week 06

DMEA REFINING DMEA
Mozambique mulls small-scale refining project in Inhambane
MOZAMBIQUE
CARLOS Zacarias, the chairman of Mozam- bique’s National Petroleum Institute (known as INP), said last week that his organisation backed plans for a small-scale refining project in the southern province of Inhambane.
Speaking to reporters in Maputo, Zacarias said that the project would involve the process- ing of light crude oil from Inhassoro, one of four hydrocarbon fields discovered in the Mozam- bique Basin. Inhassoro is close to the Pande and Temane licence areas, he noted.
INP hopes to see Inhassoro deliver about 5,000 barrels per day (bpd) of oil to the proposed refining facility, he explained. The plant will use the crude as feedstock for the production of liq- uid petroleum gas (LPG), he stated.
Zacarias went on to say that work on the new refinery was already underway. The facil- ity should be able to start production in two or three years, he said. It will eventually turn out 20,000 tonnes per year (tpy) of LPG that can be packaged in cylinders and used as cooking gas,
he said. This is enough to cover 70% of Mozam- bique’s domestic demand at current levels, he added.
Inhassaro, Pande and Temane, along with Buzi, all lie within the Mozambique Basin. They were discovered in the 1950s by Gulf Oil, which merged with Standard Oil of California to form Chevron in 1985. Both Pande and Temane are under the control of South Africa’s Sasol. The former field contains natural gas, while the latter holds both gas and condensate. Sasol has been extracting gas and condensate from the sites since 2004.
According to Zacarias, INP has been certify- ing the costs for development work at Pande and Temane since 2004. The institute is now working with the World Bank to provide the same kind of certification for Mozambique’s LNG projects, he stated. The certification process involves check- ing the figures provided by oil and gas companies in order to make sure no recoverable costs have been overlooked, he said. ™
Sudan rations fuel in response to shortages
SUDAN
SUDAN’S transitional government responded to burgeoning shortages of refined fuels by introducing a rationing regime on February 10. According to press reports, authorities in Khar- toum are now limiting motorists to buying four gallons (18.2 litres) of diesel or gasoline per vehi- cle every two days.
Energy Minister Adel Ibrahim told reporters on February 10 that he expected conditions to improve soon. “Supplies are continuing. There is no need to panic,” Reuters quoted him as saying.
Ibrahim did not say, though, when the short- ages might be resolved. Sudanese authorities have attributed the problem to a break in a pipe- line that supplies oil to one of the country’s three refineries. They have claimed that repair work is under way but have not said exactly when the pipe might resume operations.
The fuel shortages have wreaked havoc on Sudan’s economy and exacerbated popular dis- content with the transitional government. Reu- ters reported on February 11 that drivers hoping to buy fuel from retail filling stations had formed queues that stretched for several miles. It also said that taxi drivers in Khartoum had increased
their rates to make up for their difficulties in securing fuel.
The transitional regime’s options are limited. For financial and logistical reasons, it cannot import enough gasoline and diesel to make up for the drop in domestic supplies. More specif- ically, its foreign currency reserves are low, and the country’s road and port facilities are not equipped to handle large volumes of imported fuel.
Meanwhile, the transitional government must also contend with the previous regime’s policy of subsidising fuel prices. Sudan currently caps prices at below-market levels, with gasoline costing about $0.12 per litre and diesel around $0.08 per litre. Officials in Khartoum said earlier this year that they wanted to phase the subsidies out slowly, over a period of 18 months beginning in March, and replace them with direct pay- ments in cash to impoverished citizens.
The shift would benefit the government, which currently devotes about 36% of its budget to fuel price supports, but it could trigger unrest and street protests. As such, Khartoum has yet to secure approval for its plans. ™
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