Indeni Energy Company to commence refining operations following the receipt of commingled feedstock from the pipeline, according to Energy Minister Peter Kapala. The refinery, which has been non-operational for nearly two years, has received and stored the entire quality of commingled feedstock from the pipeline. Both Indeni and Tazama tanks have received roughly 94,000 cubic meters of the feedstock. The maintenance exercise was completed by Indeni Energy on March 17, 2023, in preparation for the commencement of operations.
Last week, the Minister announced that the conversion process of the Tazama pipeline is almost complete, with 90% of all works scheduled for completion by March 18, 2023. All crude oil stored in the pipeline since Indeni Refinery was shut down by the PF government in April 2021 has been removed, stored, and is ready to be refined. The Indeni plant is scheduled to process the commingled feedstock by March 18, 2023, with funds raised to pay for pipeline cleaning and conversion costs, debts owed by Tazama Pipeline Limited, and operations and maintenance costs.
The pipeline will be used to pump diesel from Dar es Salaam to Ndola using the older and smaller pipe, while the newer, bigger-gauge pipe will transport finished products to the Mpika terminal. The Zambian government plans to expand storage facilities and increase the number of pumping and loading gantries at Mpika to improve transportation efficiency. Diesel offloaded at Ndola and Mpika will be transported to other parts of Zambia using Zambian tankers only.
The operationalization of Tazama Pipeline to carry finished products is expected to lower the pump price of diesel by reducing transportation costs. The government is also looking to reduce the pump prices of both petrol and diesel by introducing bulk purchases of petroleum products. Under this plan, oil marketing companies will pool resources to order at a known price negotiated by the government. At present, procurement is fragmented and not helpful to the consumer.