Home » Industry » Noic Acquires U.S.$3,6 Million Fuel Depot

STATE-owned National Oil Infrastructure Company of Zimbabwe (NOICZ) has acquired a fuel depot in Bulawayo for US$3,6 million, as it moves to push its products in the southern and western regions, the Financial Gazette’s Companies amp Markets (CampM) has established.

NOIC, which was established in 2011, has a critical role and mandate in the transportation of petroleum products into the country using the petroleum pipeline from Beira in Mozambique to Msasa depot in Harare.

Energy and Power Development Minister, Samuel Undenge, confirmed the transaction in an interview with CampM over a week ago, saying the new depot has a capacity to hold 1,9 million litres of fuel.

The depot will facilitate blending and distribution of fuel in the southern and western regions.

“NOIC has bought a fuel depot in Bulawayo for about US$3,6 million with a capacity of 1,9 million litres,” said Undenge.

“The company did not have a fuel depot in that part of the country. The depot will therefore facilitate blending and distribution of fuel in the southern and western regions. The depot has been refurbished and is now ready to be commissioned.”

The size of the complex could not be immediately established as NOIC operations director, Peter Masvikeni, declined to reveal the information when contacted last week.

Currently, NOICZ operates five depots in Beira, Feruka near Mutare, Beitbridge, Msasa and Mabvuku in Harare.

All these depots are linked to the petroleum pipeline except for Beitbridge which receives petroleum products overland through rail and road system.

Undenge said progress has been made towards positioning Zimbabwe as a regional centre for the supply and distribution of refined fuels.

Zimbabwe has competitive aantage because of its location with a huge fuel storage capacity.

NOICZ commands over 500 million litres of storage capacity within the country.

According to Undenge, the Mabvuku depot has a capacity of 360 million litres while the Feruka depot has a capacity of 118,4 million litres.

Msasa, Beitbridge and the newly-acquired Bulawayo depot have a capacity of 53,8 million litres, 4,8 million litres and 1,9 million litres respectively.

The country’s capacity exceeds the one at Beira in Mozambique which stands at 32 million litres.

“This infrastructure is more than adequate for current local and regional requirements,” said Undenge adding that that Zimbabwe, taking aantage of its huge storage capacity, has convinced international oil companies to station their fuel in Zimbabwe, in bond.

“Local companies can then import fuel from within the country, greatly reducing the turnaround time.

“Some countries in the region which include Zambia, Malawi, Democratic Republic of Congo and Botswana pick some of their fuel from Zimbabwe but the volumes so picked are still low, reaching 10 million litres per month at best.

“This suggests that we should do more to capture a material share of the regional market.”

Over 95 percent of the fuel imported into the country comes into the country by pipeline and is picked at Msasa (Harare) or Feruka in Mutare where NOIC does the blending.

Turning to the petroleum pipeline capacity, Undenge said the existing pipeline reached its design capacity of four million litres per day two years ago, a development which made it difficult for the country to build stocks.

However, capacity has increased due to the introduction of drag reducers.

Drag reducers, which are also known as drag reducing agents or flow improvers, reduce friction pressure during fluid flow in a pipeline.

Using drag reducers reduces turbulence inside a pipeline and therefore allows the oil to flow more efficiently using the same amount of energy or decreased pressure drop for the same flow rate of fluid in pipelines.

Drag reducers allow for oil to be pumped through at lower pressures, saving energy and money.

Consequently, the pipeline can now pump a maximum of six million litres a day up from four million litres.

Undenge also revealed that additional booster pumps will be installed which will result in the pipeline pumping a maximum of 7,5 million litres per day with the final phase, which entails the replacement of pumps with bigger ones that would result in the throughput of 16,6 million litres per day.

The 408 kilometres pipeline, built in 1966, stretches from Beira in Mozambique to Harare through the Feruka Oil Refinery outside Mutare.

The Zimbabwe government, through NOIC, owns 21 kilometres of the pipeline, while Mozambique, through the Companhiado De Pipeline Mozambique-Zimbabwe, controls the rest.

Source : Financial Gazette