Pipeline Conversion Complete, Will Lower Cost of Fuel in Zambia

Having announced last week that the conversion of the Tazama pipeline was 90% complete, Peter Chibwe Kapala officially opened the valve on Monday morning for the diesel at Tazama Pipelines Limited at the Bwana Mkubwa Terminal in Ndola.

On Sunday, Mr. Kapala confirmed that Indeni Energy Company would be tasked with refining the commingled feedstock stored in the pipeline, a volume estimated to be 94,000 cubic metres of fuel. The crude oil feedstock had been removed and stored awaiting refinement, having been left to sit in the pipeline after the Indeni Refinery was shut down along with the Tazama pipeline in April 2021 by the PF Government.

The minister for Energy also reiterated his assurances last week that the commingled feedstock would help pay for the conversion and maintenance of the pipeline. Mr. Kapala officially commissioned the commencement of processing on Sunday afternoon at a remodelled Indeni Energy headquarters.

In a statement at the Indeni plant, Mr. Kapala said that the reopening of the upgraded pipeline allowed the Energy Ministry to “successfully use local engineers to put back the plant,” and that the Indeni plant and pipeline “will open up to the importation of finished products”, the majority being diesel from Dar es Salaam.

The new pipelines will allow larger bulk purchases of diesel, and the UPND government has been incentivising Zambian fuel business to co-purchase in bulk to further improve fuel prices in Zambia.

After opening the valve, Minister Kapala confirmed that Indeni and Tazama “have received and are storing the whole quantity of commingled feedstock from the pipeline.” He was also glad to announce that diesel transported from Tazama Pipeline would cost Zambian owned tankers “$49 per metric tonne from $171 per metric tonne”, since the diesel was being piped directly to Zambian terminals rather than transported over land by tanker. Mr. Kapala added that Congo fuel tankers would begin to buy diesel from Tazama.

The Energy Minister reminded those present that the opening of the pipeline was “65 days ahead of schedule”. Among the other statistics collected by the Ministry for Energy was that fuel transportation costs had been reduced by 60%, and that ethanol sourced from local sugar cane, maize and cassava would be blended with diesel at the Indeni plant, improving the prices of these three crops for local smallholding farmers.

Mr. Kapala said that discussions with Congo fuel importers were ongoing, as importing fuel into the Congo by tanker from Ndola would be significantly cheaper than from Dar es Salaam. He said that the Zambian fuel economy would enjoy the effects of reduced prices and improved sales from May onwards.

Also present was the Managing Director of Indeni, Evans Mauta. The Director said the firm would be refining the commingled feedstock into kerosene, jet fuel, petrol, diesel and other petroleum products.