Zim aims for Q3 launch of 3bn litres oil pipeline rollout
ZIMBABWE and Mozambique are finalising the rollout of a US$15 million deal to ramp up capacity at the Beira–feruka transnational oil pipeline to three billion litres annually, officials said this week.
In an interview with the Zimbabwe Independent, Gloria Magombo, permanent secretary in the Ministry of Energy and Power Development, said the Beira–feruka pipeline, which currently handles 2,19 billion litres of oil annually, will have its capacity bolstered by the third quarter (Q3).
She said initial stages of the project had been commissioned in Mozambique, while Zimbabwe was fine-tuning loose ends of the deal before the rollout.
Demand for fuel has been robust in the past few years, as Zimbabwe’s motor vehicle fleet surges, driven by a flood of grey imports from Japan.
Zimbabwe National Statistics Agency data show the domestic fleet rose by 6,9% to almost 1,5 million in December 2022, compared to just under 1,4 million as at December 31, 2021.
But a vexing power crisis precipitated by decades of undercapitalisation, and alleged plunder and mismanagement at the state-run Zesa Holdings has also sparked higher demand for fuel in industries, which have been running on diesel-fired generators.
A bigger crisis has been simmering this year, following a brutal drought that has affected water levels at the 1 050 megawatt Kariba south hydroelectric power facility.
Magombo said while also making strategic moves to tap into potentially lucrative opportunities to distribute fuel in regional markets, Zimbabwe’s investment was meant to meet robust demand from improving economic activity.
In January, the Zimbabwe Investment and Development Agency said it issued 615 licences to investors worth almost US$9,7 billion during the year ended December 31, 2023, many of them in energyguzzling sectors like mining.
Magombo said the long-term plan was to reach a five-billion litre annual capacity.
“I am sure from last year we were talking about how we want to go ahead with our vision of being the regional hub for fuel distribution,” she said.
“The work on the pipeline expansion has been done. On our side we have finalised. We are hoping that by September, we would have increased to three billion litres.
“On the Mozambican side, I think the first phase has already been commissioned to allow for us to push up to three billion,” Magombo said.
The expansion will represent an 810 million litre increase in capacity for the 294-kilometre-long pipeline, which connects Harare from Beira in Mozambique.
The National Oil Infrastructure Company (Noic), a state-owned outfit, is spearheading the upgrade of the pipeline, which in Zimbabwe, flows from Feruka in Mutare to Msasa in Harare.
“We have been engaging the traders to say we now have the capacity to even push more,” Magombo said.
“The reason why we are increasing this pipeline capacity is we have seen an increase in general in the consumption internally because of economic activity and we are also targeting the regional market as our ultimate area of supply, which will then increase activities in Zimbabwe.
“I am sure you are aware that last year we did commission the ethanol production storage plant in Msasa.
“That one is now fully operational and we are hoping that this year we can then smoothen out the blending to ensure that we consistently maintain a certain level because we now have more storage capacity,” she added.
The developments also come after the government opened a US$11 million Liquefied Petroleum Gas storage and handling facility in Ruwa with a holding capacity of 650 tonnes.
The LPG venture is another multi-million-dollar construction project being carried out by Fossil Contracting.