ZAMBIA – The governments of Zambia and Angola are expected to sign a Memorandum of Understanding (MoU) that will facilitate the commencement of a feasibility study on the establishment of the Angola-Zambia Oil Pipeline.
Speaking in an interview with the Zambian Business Times, Energy Minister Mathew Nkhuwa said the signing of the MoU will take place in May 2021.
“Well, we are currently to finalizing the MoU so that we can sign with our Angolan counterpart, suffice to say that the MoU signing might be done virtually, or we will have to travel to Angola depending on the Covid-19 situation. The MoU is to allow technocrats to start working on the feasibility study to come up with the costings, duration and capacity of the pipeline,” he said.
Zambia currently imports all its petroleum requirements, mainly from the Middle East, through the port of Dar-es-Salaam in Tanzania while other refined petroleum products are imported via Mozambique, Tanzania and South Africa.
Nkhuwa said the coming into play of the oil pipeline would help to reduce of burden of importing fuel and noted that transporting fuel from Tanzania and other neighbouring countries using trucks was expensive, hence its envisaged that using the pipeline from Angola would be much cheaper.
“To transport fuel from say Tanzania using trucks is expensive, so if we are going to use the pipeline, the price will be cheaper. As the Government, that is what we are looking at and, we will have two sources of transporting fuel, the existing Tazama pipeline and the Angola-Zambia oil pipeline in case we have a problem on one, the other one remains working,” Nkhuwa added.
He said that for example in May of 2021, the single storage point where they offload fuel from in Dar-es-Salaam is going to be under maintenance, so if it is under maintenance for one month then we will have only Beira in Mozambique.
“The MoU is to allow technocrats to start working on the feasibility study to come up with the costings, duration and capacity of the pipeline”Mathew Nkhuwa – Energy Minister, Zambia
Nkhuwa explained that if there is an alternative line, it makes life easier for the Government to be able to facilitate supply fuel to the country.
The minister said the Angola-Zambia oil pipeline will act as a source of security of supply and the pipeline is cheaper than trucking the fuel from Dar-es-Salaam.
“The demand for fuel is forever increasing, so we must make sure that we are on top of demand otherwise if do not do anything, we will find that we will not be able to supply. At one time, just the Tazama Pipeline alone was enough to supply fuel to the whole country, but now it only supplies 40 percent of the total current demand and the other fuel must be trucked it,” he said.
Nkhuwa said Government will continue trucking in fuel because it does not want to push the truckers out of business.
“We have the truckers that are in business, so if we remove them completely, we will kill them. We do not want to push them out of business, so they will still be bringing in fuel. The pipeline will be up to some depot where we will be putting in the tanks, and from the tanks, then it must be moved by the truckers to their respective filling stations. So, we will still need to depend on one another,” he added.
He said the pipeline will make it easier to transport fuel and lighten the burden of fuel procurement and logistics once in place.
Petroleum remains one of Zambia’s main import commodities and a trade deal with Angola would make result in huge economic benefits to both countries as Zambia can supply Agro and food products at a lower rate while Angola can likewise supply fuel with reduced logistical costs.
Zambia neighbour to the west, Angola has huge petroleum reserves and is currently Africa’s second largest producer to Nigeria.
The two countries had some historical differences which were mostly caused by colonial legacies.
The two neighbouring countries have been working through to mend fences and be able to meaningfully trade with each other.
Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy, and more. SUBSCRIBE HERE