The Sunday Mail
Nelson Gahadza
THE National Oil Infrastructure Company of Zimbabwe (NOIC) says ongoing capital projects aimed at helping to ensure the security of fuel supply are progressing according to plan and are expected to be complete by the end of the first quarter of 2024.
The projects include the Ruwa liquefied petroleum gas (LPG) and the Mabvuku ethanol storage and handling facilities.
The company is also engaged in the pipeline capacity upgrade project, which has reached 70 percent completion stage. NOIC is among the 20 parastatals that were put under the Mutapa Investment Fund (MIF), and its core business is to provide fuel infrastructure, bulk transportation, trading, restorage and handling of petroleum products.
In 2017, the firm diversified its operations to include fuel importation and trading through Genesis Energy, and ethanol production through Fuel Ethanol Company of Zimbabwe (Private) Limited, a joint venture with Triangle Limited.NOIC wholly owns Petrozim Line (Private) Limited. Petrozim Line owns and operates the pipeline from Feruka in Mutare to Msasa, Harare.
On the other hand, the pipeline from Beira to Feruka is owned and operated by Companhia do Pipeline Moçambique (CPMZ).
NOIC chairman Mr Innocent Chiganze said the ethanol storage tanks are already operational, while construction work in the first phase of the Ruwa LPG project has just been completed, with trading set to start this week.
“In October 2023, the company completed Phase 1 of the LPG project, which consists of two bullet LPG tanks with a combined capacity of 620 tonnes, complete with receiving and dispatch facilities. Through the facility, NOIC will offer LPG players hospitality and trading services, thus fulfilling its mandate of providing adequate infrastructure to ensure the security of supply of petroleum products to the nation,” he said at the 2022 annual general meeting of the company on Thursday.
He said the pipeline capacity upgrade project progressed well in 2022, and the production of the mainline pumps reached 70 percent completion level, while the geotechnical survey for the Feruka terminal had been completed. The pipeline capacity upgrade project will culminate in an increase in the pumping capacity to 3 billion litres per year from the current 2,19 billion litres.
Mr Chiganze said the main pumps of the pipeline project that have been manufactured are now on the high seas, and by the end of the first quarter, the upgrade will be complete.
“We are racing against time because our partners in Mozambique have completed theirs and are pumping at increased capacity,” he said.
Mr Chiganze noted that progress on the project was affected by delays in the shipping of the equipment due to the ongoing Russia-Ukraine conflict.
NOIC chief executive Mr Wilfred Matukeni said the company performed exceptionally well in 2022, and 2023 is expected to be much better, having already passed the 2 billion litre mark.
He said the firm’s strategic focus is to ensure national security of supply and be the fuel distribution hub for Southern Africa by December 31, 2025.According to the company’s annual report, the firm pumped a total of 1,945 billion litres from January 2022 to December 2022, compared to a prior-year volume of 1,398 billion litres.
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“The favourable performance for 2022 is attributable to a combination of high product availability for pipeline injections, increased transit volumes, high equipment availability throughout the entire system, and optimised pipeline operations.
“This cumulative increase in the use of pipelines is reflective of an increase in traders’ confidence in transporting their products through the pipeline,” said Mr Matukeni.
The annual total was distributed as 65.81 percent gasoil, 33.74 percent mogas and 0.45 percent jet A1.
“The pipeline throughput mix is a close reflection of the annual domestic consumption pattern,” Mr Matukeni said. For the year under review, revenue grew by 527 percent to $168,024 billion, compared to $26,798 billion in the prior year.
Pipeline revenues for the year 2022 stood at $44,037 billion against a comparable prior-year figure of $8,278 billion.
According to Mr Matukeni, in 2022, the company, in collaboration with CPMZ, embarked on Project Cobalt, which was designed to encourage traders to transport fuel products to hinterland markets through pipelines.
He said a rebate was offered on the pipeline tariff for all products destined for the hinterland markets.
“As a result, the volume of product transported through the pipeline for transit into the hinterland markets exponentially increased to a total of 270 million litres from paltry figures in prior years,” he said.
NOIC has since declared a US$1,050 million dividend to MIF after performing beyond expectations in 2022 in terms of volumes and product sales.
NOIC is among the 20 parastatals that were put under MIF, which is a generational fund for future and current generations.
Mutapa chief executive Dr John Mangudya said the fund is expecting another dividend from NOIC, which is already working on the accounts for 2023.
“The fund is a generational fund for future and current generations and is supposed to have a long-term stabilisation effect in terms of having macro-economic stability,” he said.
He added that the fund will look after the 20 State enterprises to ensure good corporate governance under a synchronised monitoring system.
