Namcor eyes storage tanks

NAMCOR, the Government-owned petroleum company, has put out a N$700 million tender for the construction of a fuel storage facility at Walvis Bay in the first half of next year.

The open-ended tender calls for proposals for the construction of the facility, a strategic partnership and the funding of the infrastructure. The Managing Director of Namcor, Sam Beukes, told The Namibian yesterday that the cost of the project is estimated to be between N$600 and N$700 million, but these estimates could change when the final detailed engineering proposals are on the table.The project, apart from other spin-offs, is aimed at building a strategic fuel reserve for the country to ensure security of supply in the highly volatile fuel industry.The facility, Beukes said, will give Namibia an edge and give it a better bargaining chip when buying in bulk.”When we have storage facilities we can buy in large quantities and not be vulnerable to fuel price volatility as we have seen this year,” said the Namcor boss.At present there is no “clear funding strategy” for the multi-million dollar project, and tenderers are invited to make proposals regarding funding and whether they would want to take up shareholding.Beukes made it clear that whatever arrangement they enter into with the winning tenderer, the control and decision-making of the storage facility will rest with Namcor.He also revealed that Namcor had entered into negotiations with local and international banks, who are on “standby” to finance the project if tenderers cannot raise own finances.”We can go for pure bank financing and get a Government guarantee – it is important that the Government sees the strategic nature of oil storage,” Beukes pointed out.He told The Namibian that the Walvis Bay municipality has allocated a plot of land next to the harbour town’s weighbridge for the project.At present the municipality is busy rezoning the plot to heavy industrial.An Environment Impact Assessment study has been completed and submitted to the Walvis Bay local authority.Asked why Namcor needs to build a storage facility, he said Namibia does not have its own tanks to store its fuel imports and depends on the tanks of oil majors at Walvis Bay.Namibia, a net fuel importer, consumes about 70 000 tons of fuel a month.He said the country’s consumption of fuel has grown over the years and oil companies have not invested in their ageing tanks, except for doing maintenance.”The fuel storage facility will make us independent from local oil majors when it comes to storage and give us flexibility in the trade of fuel,” Beukes said.Referring to the incident in February this year, when oil companies refused to pump Namcor fuel imports into their tanks, Beukes said: “Had we had our own storage facilities, the vessel would not have been returned with its cargo.It is important that we have our own facilities to control our destiny.”He further informed The Namibian that landlocked countries such as Botswana, Zambia and even Angola had expressed an interest to import fuel through the port of Walvis Bay.”The storage facility will not only cater for the Namibian market.We will also make provision for our landlocked neighbours.We have received numerous requests from some that they would want to import their fuel through Walvis Bay, but without storage tanks, we cannot accommodate them,” Beukes said.According to an Engineering News report, the facility is also aimed at “establishing Namibia as a petroleum hub for the West African coast”.The first phase of the N$700 million project will have a capacity of 118 million litres of fuel and when completed will store around 240 million litres of diesel, petrol and jet fuel.The project will create 1 500 jobs during its construction phase, with the number of jobs declining to 60 when the facility starts operating.Beukes said local service providers would not be excluded from the project, adding that specific provision would be made for them in the project outline.(Additional reporting by Engineering News)The Managing Director of Namcor, Sam Beukes, told The Namibian yesterday that the cost of the project is estimated to be between N$600 and N$700 million, but these estimates could change when the final detailed engineering proposals are on the table.The project, apart from other spin-offs, is aimed at building a strategic fuel reserve for the country to ensure security of supply in the highly volatile fuel industry.The facility, Beukes said, will give Namibia an edge and give it a better bargaining chip when buying in bulk.”When we have storage facilities we can buy in large quantities and not be vulnerable to fuel price volatility as we have seen this year,” said the Namcor boss.At present there is no “clear funding strategy” for the multi-million dollar project, and tenderers are invited to make proposals regarding funding and whether they would want to take up shareholding.Beukes made it clear that whatever arrangement they enter into with the winning tenderer, the control and decision-making of the storage facility will rest with Namcor.He also revealed that Namcor had entered into negotiations with local and international banks, who are on “standby” to finance the project if tenderers cannot raise own finances.”We can go for pure bank financing and get a Government guarantee – it is important that the Government sees the strategic nature of oil storage,” Beukes pointed out.He told The Namibian that the Walvis Bay municipality has allocated a plot of land next to the harbour town’s weighbridge for the project.At present the municipality is busy rezoning the plot to heavy industrial.An Environment Impact Assessment study has been completed and submitted to the Walvis Bay local authority.Asked why Namcor needs to build a storage facility, he said Namibia does not have its own tanks to store its fuel imports and depends on the tanks of oil majors at Walvis Bay.Namibia, a net fuel importer, consumes about 70 000 tons of fuel a month.He said the country’s consumption of fuel has grown over the years and oil companies have not invested in their ageing tanks, except for doing maintenance.”The fuel storage facility will make us independent from local oil majors when it comes to storage and give us flexibility in the trade of fuel,” Beukes said.Referring to the incident in February this year, when oil companies refused to pump Namcor fuel imports into their tanks, Beukes said: “Had we had our own storage facilities, the vessel would not have been returned with its cargo.It is important that we have our own facilities to control our destiny.”He further informed The Namibian that landlocked countries such as Botswana, Zambia and even Angola had expressed an interest to import fuel through the port of Walvis Bay.”The storage facility will not only cater for the Namibian market.We will also make provision for our landlocked neighbours.We have received numerous requests from some that they would want to import their fuel through Walvis Bay, but without storage tanks, we cannot accommodate them,” Beukes said.According to an Engineering News report, the facility is also aimed at “establishing Namibia as a petroleum hub for the West African coast”.The first phase of the N$700 million project will have a capacity of 118 million litres of fuel and when completed will store around 240 million litres of diesel, petrol and jet fuel.The project will create 1 500 jobs during its construction phase, with the number of jobs declining to 60 when the facility starts operating.Beukes said local service providers would not be excluded from the project, adding that specific provision would be made for them in the project outline.(Additional reporting by Engineering News)

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