Govt fast tracks Mozambique fuel negotiations

MBONGENI MGUNI
Staff Writer | Tuesday June 1, 2010 00:00

 

Botswana hopes that it will soon sign inter-governmental Memoranda of Understanding (MoUs) with Mozambique and Zimbabwe, thus securing fuel supplies, routes and storage facilities from Mozambican ports, through Zimbabwe to Botswana.  Already Zimbabwean and Mozambican authorities have offered 'good condition' facilities for use by Botswana-bound petroleum products either in transit or in storage.

Analysts believe that after the MoUs, initial fuel supplies to Botswana will come by rail and road, while the proposed Harare-Francistown pipeline is under development. In addition, government also plans to develop the Tshele Hills and Francistown storage facilities to hold 150 million litres, equivalent to 60 days of national consumption. Presently, the two facilities hold 22 days of supplies.     

During last week's trip to Mozambique, the Minister of Minerals, Energy and Water Resources, Ponatshego Kedikilwe kick-started negotiations with that country's government officials with a view to sealing a Memorandum of Understanding later this month.

'The difficulty in having to implement the alternative routes and sources at this stage lies with the ongoing negotiations and discussions on transportation logistics since the proposed routes and sources are further away from the conventional Durban port,' said Ministry spokesperson, Potso Thari.

'The negotiations will, hopefully, be concluded by mid- June 2010.' Mozambican media quoted that country's Energy Minister, Salvador Namburete as saying: 'We are looking at what infrastructure can be used to that end, including the available storage and transport resources.

Our national fuel supply companies are to cooperate. In the coming days, there will be a draft memorandum which will establish the base for cooperation between the two countries.' Botswana imports nearly all its fuel through South Africa, with marginal supplies coming from Namibia. Recent strikes in South Africa, exposed Botswana's over-reliance on Durban fuel supplies, as the industrial action caused local shortages.

As a result, Botswana is accelerating the diversification of its fuel routes and sources, with the high capacity ports of Beira and Matola in Mozambique being the most logical option. Any supplies from Mozambique will, by necessity, have to be imported through Zimbabwe, which already has a 600-kilometre oil pipeline to Beira.

Botswana's initial overtures to Zimbabwe earlier this year struck success with Harare offering use of its oil storage facilities, which could then form the inlet of the proposed Harare-Francistown pipeline.  The planned pipeline could cost P6 billion, more than the planned Matola-Nelspruit (South Africa) pipeline which is expected to cost about P4 billion. The latter pipeline's developers expect to make supplies available to Botswana upon its completion, currently set for 2011.

Government first studied the economic viability of developing cross-border fuel supply pipeline in 2007. Under NDP 10, government is expected to soon approach Namibia, to further diversify its fuel supplies and routes away from South Africa.

It will also soon investigate the feasibility of establishing a national oil company.