Namcor to fly solo on fuel storage facility

Claims tender process will delay implementation of the project

12 April 2019 | Energy

The National Petroleum Corporation of Namibia (Namcor) says it will have to manage the strategic fuel-storage facility on its own for now, as the tendering process to find a partner would delay the project.

“We are re-evaluating our initial position to appoint a technical expert or to run the facility ourselves. This is because a public procurement exercise is a process that can take up to two years,” said Namcor spokesperson Utaara Hoveka.

The facility was a government project, he pointed out.

“We expect the facility to be officially handed over to Namcor in May. Remember that the government [through the] ministry of mines and energy owns the facility. Namcor will run and manage it on behalf of the government,” he said.

Namcor initially intended to invite bids from prospective partners before mid-year.

“We will not directly run the facility but will appoint a technical partner that will run the facility for about three years on our behalf,” Hoveka had said earlier.

At the end of that period, Hoveka said, Namcor might choose to let another company manage the facility, or manage it themselves.



Benefits accruing

The facility was initially estimated to cost the government N$900 million, but the construction costs shot up to N$5.6 billion.

Against this backdrop, Namibian Sun asked Hoveka where the immediate benefits would come from, given the high costs incurred.

“At the moment the country runs on an extremely limited capacity. This is risky, especially during high seasons in the oil market, taking into consideration that Namibia does not yet produce a drop of oil. It is also risky in the case of any unforeseen eventualities, either in South Africa or the oil-producing countries,” Hoveka responded.

He added that the facility would make it possible for Namcor to import liquefied petroleum gas or liquefied natural gas - a first for Namibia.

“Namcor will further host other oil companies, thereby generating money through throughput fees related to the jetty and pipeline. Namcor will also no longer incur huge storage costs or a lack of storage in the town of Walvis Bay,” Hoveka said at the time.

The facility will store 70 million litres of petroleum products such as petrol, diesel and paraffin.

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