National Petroleum Corporation of Namibia (Namcor) managing director Immanuel Mulunga says ongoing pipeline modifications have kept the facility from achieving its full potential.
“We envisage that the hosted companies will ramp up their volumes in line with the agreements that full utilisation will be achieved as soon as the changes are made,” he says.
The storage facility consists of seven tanks with a capacity of 75 million litres, meaning it currently has a capacity for 45 million litres only.
Mulunga says the facility will be fully used as soon as pipeline modifications and other outstanding matters are completed.
He says Namcor has gradually increased the utilisation of the facility with its own imported volumes and that of its two hosted companies.
The two companies storing fuel at the facility are Gunvor Middle East DMCC and Validus Energy Namibia, which won a bid to do so.
According to Mulunga, Namcor has seen an increase in regional demand which is supplied from the facility.
Namcor discharged 644 million litres through the new tanker jetty between December 2020 and June 2022.
Terminal throughput of 443 million litres was discharged through the facility, including backloads and transfers during the period.
The facility is the only 100% state-owned oil-storage site in the country.
It was constructed to increase the supply of petroleum products in the event the country is unable to import petroleum products from the international market.
Namcor operates the facility on behalf of the government and pays a monthly operator fee to the Ministry of Mines and Energy.
Mulunga says due to this, Namcor charges a throughput fee to hosted companies at the tank farm, and a pipeline fee for all hosted companies and other oil companies for the usage of the pipeline.
“Namcor then uses these funds to fund operational costs, maintenance, boat mooring costs and more,” he says.
The construction of the facility commenced in January 2015 and was officially handed over to Namcor on 1 March 2021.
The facility is financed through two African Development Bank loans acquired for the government through the Development Bank of Namibia – one of N$2,8 billion, and another of N$1,5 billion.
The Namibian in 2020 reported that the government will be repaying N$30 million per month towards the N$2,8 billion loan for 13 years.
The N$1,5 billion loan is being repaid at N$25 million per month over eight years.
The government has also committed to interest of N$2,7 billion, which brings the total repayment of the two loans to N$7 billion. The repayment of the loans are financed by a fuel levy of 60 cents per litre on both controlled products.
Email: bottomline@namibian.com.na
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