The construction of the private sector petroleum pipeline from Mozambique to SA is still on hold, while Petroline - the company building it - holds discussions with the government regarding petroleum tariffs.
The project is a significant initiative in the local petroleum industry as it signals the entry of private players into the petroleum pipeline business. State-owned Transnet Pipelines is currently the only player. The pipeline is also meant to ensure security of supply of petroleum products for the inland market.
The National Energy Regulator of SA (Nersa) has licensed the pipeline to carry 3,5-billion litres of petrol and diesel a year.
Four years ago, Petroline asked Nersa to set a maximum tariff of 42,7c/l for petroleum pipelines. At the time, Rod Crompton, the Nersa member responsible for pipelines, said Petroline made the request in order to facilitate discussions with financiers and future customers.
Nersa said yesterday the project was still on hold, & based on the last progress report received from Petroline in February 2012 in terms of its construction licence conditions& In 2010, Petroline raised concerns with the Department of Energy about the partial state funding of Transnet's new multi-product petroleum pipe-line, among other things.
Nersa said the delay would not affect Petroline's licence conditions because the regulator amended the company's licence conditions in April 2010.
& The amended conditions allow Petroline to complete the project and be ready for operation within 30 months from the date of receipt of the final environmental authorisation from the relevant authority. Nersa has yet to receive notice of such final authorisation from Petroline,& Nersa said.
The Petroleum Pipelines Act requires Nersa to promote competition and facilitate investment in the industry.
& It is a very rare phenomenon in the world and a particularly challenging one, in this instance, to introduce pipeline competition led by private sector investment into a market dominated by a state-owned monopoly,& Nersa said when it licensed the project.
Petroline director Pinky Moabi yesterday confirmed that the project was still on hold while negotiations with the government continued. According to Nersa documents, Petroline is made up of the Woesa Consortium, Gigajoule International, Petróleos De Moçambique (Petromoc) and Companhia De Desenvolvimento De Petroleum Moçambique.
When Nersa licensed the pipeline, it was supposed to come on stream at the end of 2009.
Copyright 2012 BDFM Publishers PTY Ltd. All Rights Reserved.