Mozambique, SA to build $620m fuel pipeline

A Mozambican and South African consortium, Petroline Holdings, plans to start building a $620-million oil pipeline linking Johannesburg to the port of Maputo before the end of this year.

Mateus Kathupa, chief executive of state-run Mozambican company PETROMOC, which holds a 40% stake in the consortium, said on Thursday the construction of the petrol and diesel pipeline would take six months.

The 450km pipeline, with an annual capacity to transport 3,5-million cubic metres, will facilitate fuel imports via Maputo, which is closer to Johannesburg than any of South Africa’s major ports, including Durban.

”Our aim is to have this project up and running before 2010 in order to have an additional capacity in terms of oil supplies to South Africa,” he told Reuters in an interview.

Pipeline construction was originally scheduled to have started in September last year.

Katupha said the delay was related to problems in the approval of an environmental impact study, but he expected them to be resolved by May.

”There are little issues to be ironed out such as compensation of land to the people residing in the areas where the pipeline will pass through,” he said.

Other stakeholders in the project include South Africa’s Woesa Consortium, which holds 25%, and Gigajoule International, which controls another 20%.

Companhia de Desenvolvimento de Petroleos em Mocambique (CDPM), a Mozambican consortium of small and medium companies, holds the remaining 15%.

Katupha said the pipeline would reduce the risk of fuel shortages in the interior of South Africa and cut deficiencies in transport and storage capacities.

”This is a very ambitious project that [will produce revenues of] over $800-million a year from the pumping and distribution of oil in South Africa,” he said. – Reuters

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