The Ministry of Energy has blocked the proposal citing oversaturation of the market.
Image: Mining Global
According to government sources, Zimbabwe’s Ministry of Energy has rejected plans by the South African-owned Mining Oil and Gas Services (MOGS) to build a $1 billion fuel pipeline.
The proposed 550km pipeline would run from Beira, Mozambique to Harare, Zimbabwe, with the possibility of extending as far as Botswana.
The bid to build a second fuel pipeline lost momentum following a meeting in December – during the meeting, MOGs representatives were informed that the country already receives sufficient fuel from its existing pipeline and that the market is oversaturated, leaving no room for new entrants.
The Ministry of Energy also proposed a new fuel pipeline from Namibia to service the southern parts of the country during the meeting.
The fuel sector in Zimbabwe is currently monopolized by Sakunda Holdings, which controls the existing Beira to Harare pipeline that supplies the country with the majority of its fuel.
The holding company also operates and franchises petrol filling stations, distributes commercial fuel products for mining, transport, agriculture and industry sectors, distributes a range of lubricants and chemicals and provides fuel transport and haulage services in the country.
Sakunda recently invested $11 million into the restoration of the Beira-Feruka oil pipeline, and is operating the pipeline in partnership with the National Oil Infrastructure Company as it recovers its investment.