'Noic plans $6 million ethanol depot'

Published: 07 June 2015
The National Oil Infrastructure Company of Zimbabwe (Noic) is planning a $6 million ethanol storage facility at its main Harare depot, which will also complement other fuel assets such as Sakunda Energy (Private) Limited (Sakunda)'s $12 million gantry.

This comes as Energy minister Samuel Undenge has emphasised the need for buffer stocks of the critical fuel-blending commodity and authorities have had to frequently adjust the blending ratios in response to shortages at the country's main supplier Green Fuel.

"We are currently talking to the ethanol producing company so that we build stocks to avoid a scenario caused by heavy rains and also there should be a statutory maintenance of the plant to shut down for a period of one month to give room for service," he said.

According to tender documents seen this week, Wilfred Matukeni's company is hoping to construct or build a five million-litre storage tank at its Mabvuku yard.

With the Zimbabwe Energy Regulatory Authority stressing that the country needs about 90 million of ethanol yearly to sustain the prescribed fuel blending ratio or levels of 15 percent, analysts say there are still vast opportunities in the sector, which the State-run institution was hoping to tap into.

In 2013, the energy regulatory said petrol and diesel consumption rose from 560 million litres in 2009 to about 1,4 billion litres. But from time-to-time, President Robert Mugabe's government has been forced to slash the 15 percent blending ratio of petrol to five percent as the country's sole supplier has often battled supply problems.

At a time State officials say Noic could be looking at securing the key energy supply sector, independent analysts say the five million litre facility might not be enough to cater for Zimbabwe's surging car import figures or number.

In the tender documents seen by businessdaily, Matukeni's company says it is looking for contractors to "design of a form-based fire protection system for the tank and associated equipment" as well as "piping, and associated systems… which connect to existing infrastructure".

The development also comes as regional oil giant Engen - a joint venture between South African investors and Malaysia's Petronas Group -  has announced plans to build a 25 million litres fuel distribution, and storage facility straddling Zimbabwe, and Mozambique.

Formed in 2011 as a wholly-owned government entity, Noic has a critical role and mandate in the transportation of petroleum products into the country from Beira to the Msasa depots.

In recent times, it has also collaborated with the likes of Sakunda and CBZ Bank Limited in the procurement of credit lines for a top European bank. Under the arrangement, Kuda Tagwireyi's company has played a critical role raising nearly $330 million in facilities that have been utilised in various sectors of the economy.

Apart from the $120 million tranche announced in October 2013, the Century Towers outfit has followed up this facility with another arrangement last year.

At the time, Sakunda and its partners not only used their respective balance sheets to raise the cash, but bank officials stressed that the money would benefit various sectors of the economy.

Its Msasa fuel handling facility, meanwhile, is scheduled for completion by April and has been described as one of the country's most creditable private-public sector partnerships in recent times.
- dailynews
Tags: Oil, Noczim,


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