Fuel thirsty Zambia to seal supply deal

  1. Posted on Friday 1 January 2010 - 11:17
    Sanday
    Image of Sanday
    Sanday Chongo Kabange, AfricaNews reporter in Lusaka, Zambia
    Zambia is set to sign a new 1.4 million tonnes oil supply contract this month after the expiry of an existing arrangement with Kuwait's Independent Petroleum Group (IPG), energy minister Kenneth Konga said.
    zambia fuel shortage Photo: Sanday
    Konga said Zambia, Africa's top copper producer, would announce a new preferred bidder to supply its crude oil during the same month after the closing of tenders.

    In the past Zambia has concluded long term contracts lasting two years for the purchase of 1.4 million tonnes of oil but Konga did not specify what period the coming deal would cover.

    The country's fuel needs have grown along with mining activity.

    The government had initially said it would rely on imports of petrol and diesel to supply to the mines, the country's economic lifeblood, and for other uses until April 2010 when crude oil imports where expected to resume.

    Finished products

    Zambia resorted to imports of finished petroleum products after its sole refiner, Indeni Petroleum Refinery, shut due to a machinery fault last October ahead of a planned routine maintenance closure during the same month. The refinery has slowly been ramping up production.

    "The closing and opening date for the oil tender (will now be) January 8, 2010 and we expect that the long-term contract will be signed in the same month," Konga said.

    Media reports say an industry expert said that fuel imports, which the country started in October, would continue to avoid disruptions mainly to the copper mines which use a lot of diesel in their production of minerals.

    "When the tender closes there will be sufficient time for us to agree with the supplier when the first shipment will be delivered but we don't anticipate shortages of fuel because there are measures in place for a steady flow," Konga said.

    The Zambia Public Procurement Authority (ZPPA) said last month that the 1,440,000 tonnes buyer's option would be brought in cargo lots of 60,000-90,000 tonnes at evenly spread intervals and that the signing of a new crude oil supply deal would be delayed until April.

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