ENERGY minister Matthew Nkhuwa says depreciation of Indeni Refinery in Ndola has resulted in the equipment storing only about 600,000 tonnes of crude per year, down from the facility’s design-installed annual capacity of 1.1 million tonnes.
And Angola’s mineral resources and petroleum minister Dr Diamantino Pedro Azevedo says oil is a developmental catalyst.
Zambia and Angola signed a Memorandum of Understanding (MoU) for cooperation in the domain of petroleum and natural gas in Lusaka yesterday.
The two ministers signed on behalf of their respective countries.
Speaking before signing the MoU, Nkhuwa told a visiting Angolan delegation that importation of petroleum products into Zambia was in two modes – refinery and finished products.
“Zambia depends entirely on the importation of petroleum products to satisfy her fuel needs and [to] support socio-economic activities,” Nkhuwa said.
The minister also disclosed that in order to recapitalise Indeni Refinery, the government was in the process of acquiring an equity partner through the Industrial Development Corporation (IDC).
“The refinery has a design-installed capacity of 1.1 million tonnes of crude per year. This is matched with the [Tazama] pipeline capacity of 1.1 million tonnes of feedstock per year,” Nkhuwa explained.
“However, due to depreciation of the equipment, the refinery capacity has dropped to about 600,000 tonnes per year. At present, the refinery is operating at 65 per cent of its installed capacity.”
Zambia currently has only one pipeline, constructed in 1968, which transports crude oil or its petroleum products from the port of Dar-es-Salaam in Tanzania to Indeni Refinery.
Nkhuwa added that due to economic growth, over the years, demand for petroleum products “has also grown significantly such that the existing pipeline is unable to meet all the demand for fuel products.”
“To meet the current demand in Zambia and the sub-region and also to prepare for consumption in the long-term, a new delivery system must be designed and installed. A number of projects are under way to address the growing demand such as upgrading of the existing 914 km stretch of the pipeline from eight inch to 12 inch, [including] discussions with our Tanzanian counterparts for the construction of a finished product pipeline to run parallel to the existing pipeline of provincial fuel storage depots across the country,” Nkhuwa highlighted.
He said, further, the Angola – Zambia Product Pipeline Project (AZOP) was of paramount importance to Zambia and that it was for that reason that Cabinet approved the project on June 29, 2015 “with a view to facilitate development of a petroleum products pipeline transportation system to primarily supply Zambia and Angola as well as other countries in the region.”
On his part, Dr Azevedo said, among other things, oil and gas were crucial for the whole economy.
“For Angola, oil is the engine that is driving our economy. We have realised that oil is very important for development of our region – the development of Zambia and other neighbouring countries of Angola. In terms of production, the goal of the government for that mandate is to make all the efforts for the production not to go below 1.5 million of barrels per day of crude…” indicated Dr Azevedo.