The Project targeting the fuel in TAZAMA Pipeline
By Amb. Emmanuel Mwamba
TAZAMA has a constant dead stock of comingled crude oil that lie in the pipeline. This is to enable the crude oil to be pumped from Da-es-Salaam into the 1,710 kilometres pipeline to be available at INDENI Refinery in Ndola almost instaneously.
This dead stock is worth over $90million and together with that in the tanks in Ndola comes to $200million ( it’s usually a 3months supply).
Agro Fuel Investments Limited has been awarded to supply and deliver 100,000 metric tonnes of low sulpher gas oil (LSG) and 15,000 metric tonnes of kerosene for the pipeline conversion project.
The idea is push-out the crude oil deadstock worth millions of dollars, allow INDENI to process it, empty the pipeline and prepare the pipeline, clean it with kerosene for conversion to carry finished products.
The contract sum is worth K374,244,500.00 ( $51million).
Questions;
- Is TAZAMA ready to carry finished products? Government has just finished a huge investment to rehabilitate TAZAMA and has done 700km so far. The project was to install a wider pipeline to increase its capacity and restore its integrity.
The project also installed modern pump stations along the pipeline.
However the rest of of 1,000km remain unrehabilitated with integrity issues. Without finishing the rehabilitation of TAZAMA, can such a pipeline carry finished products if it had integrity issues with heavier comingled crude oil?
- Many assessments reports and studies have all revealed the dangers of carrying finished products as the pipeline cannot be properly policed or security issues to prevent sabotage, vandalism and theft of finished products may be difficult to stop.
- The plans to convert TAZAMA Pipeline into a finished products pipeline require approval from both Zambia and Tanzania as it is co-owned by both countries.
- How sure are we that the target is not just a short-term project to raid the deadstock in the pipeline which is worth over $200,000million?
- Is this the reason Government is talking of pipelines from Namibia and Angola, projects that may take a decade to complete, while clearly abandoning TAZAMA?
- Transporters and truckers that benefit from the current arrangement of transporting fuel on trucks need to be managed in relation to the security of TAZAMA.
- The contract,although open, has been awarded to a company associated with President Hakainde Hichilema. Like Alpha Commodities in Fertiliser, Agro Fuels is in the news as the proprietors are business associates with the President. Recently, Agro Fuels was compensated $26million by Ministey of Justice over an out-of- court settlement regarding the cancelled concession of Mpulungu Harbour.
CONCLUSION
Speaking to industry experts reveals that this appears to be one-off project targeting the crude oil deadstock lying in the pipeline. It is clear that Government has demonstrated since 2019, that it can run the fuel sector without TAZAMA and INDENI.
So this is a raid of the deadstock!
Industry experts have recommended that we invest in INDENI REFINERY and convert it to a full refinery so that it can process any crude oil from Saudi Arabia, Angola, Nigeria or Iran. The comingled crude required under current arrangements has sufficed so so far but a long-term solution to INDENI Refinery must be invested in.
TAZAMA and INDENI are strategic nayional assets and the careless approach to abandon these facilities, investments built at great cost, puts the country at fragile and energy risk. And associated industries that benefited from by-products of INDENI such as Ndola Energy and Ndola Lime are dead and the cost of producing copper has risen as refineries have to import heavy fuels required in the process.
This contract therefore serves short-term interests to provide cheap fuel to the country but may render the TAZAMA Pipeline moribund as security issues may not allow or may sabotage a commercial transportation of finished products using the pipeline.
