Malawi's Strategic Fuel Reserves ready for commissioning in July 2016

Date

4/20/2016 5:06:57 AM

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(MENAFN- The Maravi Post)

The National Oil Company of Malawi Limited (NOCMA) the country's state owned institution mandated to manage the three strategic fuel reserves facilities while promoting competition in the oil and gas industry has assured the public of its readiness to commission comes July this year.

The assurance comes a barely a year after similar promise was made but later the commissioning was postponed in order to install offloading meter-an omission from the initial design of the depots by the contractor.

The strategic fuel reserves including Blantyre which has the capacity to store fuel of 25 million litters Lilongwe will keep 25 million litres while Mzuzu has 10 million litres totaling to 60 million litres which can a country to have fuel for 60days.

With the loan worthy US$26 million from India government the completion of the three strategic fuel reserves are expected to boost fuel security in the country with 60 million litres an addition to 15 million litres currently the nation keeps Malawi will have 75 million litres for 75 day of fuel cover as the country requires one million litre a day.

In an exclusive interview with The Maravi Post over the weekend on the prospects of the fuels reserves commissioning after a year of the facilities construction's completion Telephorus Chigwenembe NOCMA'sCom munication Officer expressed optimism that fuel storage will be ready by July this year.

Chingwenembe said currently the contractor working on the Strategic Fuel Reserves is installing offloading meters and modifying pipes and there is also the construction of access roads to the depots with expectation that the contractors' schedules works at Lilongwe depot will be completed in May 2016 whereby official commissioning of the first depot which is Lilongwe is expected to be in use come June or July 2016.

'The construction of the tanks was indeed completed in 2015. However it was discovered that some technical components needed to be modified in order to adhere to legal requirements. The initial design of the depots provided for the use of weighbridges and the automatic tank gauging system for measuring fuel received but the regulatory regime requires the use of offloading meters for measuring product received.

'The contractor working on the project Apollo International is therefore currently installing the offloading meters. This has also involved modification of pipes at the facilities. In addition as indicated above apart from the offloading meters there were also some other works that remained like the construction of access roads to all the three depots (Lilongwe Mzuzu and Blantyre). For Lilongwe depot the road construction is underway. Similar works will soon start in Mzuzu and Blantyre' assures Chigwenembe.

He further assured the general public that when fully utilized the three Strategic Fuel Reserve facilities which have a combined storage capacity of sixty million litres will ensure security and stability of fuel supply for the country saying at the current consumption trends is an equivalent of up to two months of fuel cover for the country meaning the country would have enough stocks to keep the economy running for two months even when there are disruptions in the supply chain system.

Chingwenembe urges 'As NOCMA we appeal to all stakeholders to support the implementation of the public sector reforms in the liquid fuel and gas sub-sector of the energy sector which are twofold: First changing the country's fuel procurement system through a consolidation of all fuel demand by all oil marketers into one order under a Bulk Procurement System.

This change will facilitate the efficient management of the Strategic Fuel Reserves without financing from treasury.

'The second reform area is the designation of the Strategic Fuel Reserves as dry ports signifying that all the fuel for the country will be received through these facilities. This will help in bringing efficiency into the fuel supply chain system'.

National Oil Company of Malawi (NOCMA) Limited is government of Malawi wholly owned company registered on December 14 2010 under the companies Act of 1984 and established in line with the Malawi Energy Policy (MEP) of January 2003.

NOCMA is currently involved in fuel importation as the country's second largest fuel importer following the Petroleum Importers Limited (PIL) which consists of the following oil Marketing companies Puma Malawi Total Malawi Petroda Malawi and Engen Malawi Ltd.

Fuel shortages hit Malawi hard in 2010 and 2011during the Bingu wa Mutharika rule which resurfaced in 2012 under President Joyce leadership that both occasions put the nation at stand still in business transaction which prompted the Malawi government constructing the strategic fuel reserves to caution the burden.