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Russia’s Rosneft to build refined products pipeline from Mozambique to Zimbabwe

October 11, 2012, 17:19 UTC+3

Corresponding documents will be ready by the end of this year

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MOSCOW, October 11 (Itar-Tass) —— Russia’s oil major Rosneft will take part in the construction of a refined products pipeline from Mozambique to Zimbabwe, Roman Trotsenko, an adviser to Rosneft president, told Itar-Tass on Thursday.

According to Trotsenko, corresponding documents will be ready by the end of this year. “The project provides for the construction of a refined products pipeline from the port of Beira, via Mozambique to Zimbabwe, and the construction of a large storage facility near Harare,” he said.

“We will prepare legal documents, a joint venture agreement and will get all permits for the pipeline by the yearend,” he went on. “As a matter of fact, this is a very complicated project. It is complicated in terms of law, since from the very beginning we have two jurisdictions, and when others join it, we will have a large-scale intergovernmental agreement between six countries.”

Along with Zimbabwe and Mozambique, the pipeline will supply oil products to Zambia, Malawi, and Botswana. “It means that it is going to be a big regional distribution centre,” he said. As of today, he noted, Zimbabwe’s consumption of oil products is about five million tons, and the existing refined products pipeline is used to one hundred percent of its capacity. “Basically, oil products are delivered by motor vehicles to the distance from 700 to 800 kilometers,” he said. “That is why we believe it is a very commercially important project for the infrastructure, which is commercially justified.”

Participation in this project, in his words, is a chance for Rosneft to win a new sale market. More to it, the project will give the region a possibility to diversify supplies and cut prices. “Gasoline prices here are among the world’s highest: 1.57 U.S. dollar per litre of gasoline, and 1.45 U.S. dollars per litre of diesel fuel. It is too high, bearing in mind the fact that a port is located in a relative vicinity – some 700 kilometers away,” he said.

Rosneft has obtained a permit from the Mozambique side to increase the pipeline’s capacity. “It implies the construction of a new pipeline. It will be three-party joint venture between Russia, Zimbabwe, and Mozambique,” Trotsenko went on. The Mozambique section, in his words, might be in one hundred percent ownership, while a section that will run via Zimbabwe might be in join management.

According to Trotsenko, the first stage of the projects (without a sea terminal) will cost 700 million U.S. dollars. “We will set up a consortium, which means that financing will be done by the Russian agency for insuring export loans and investments, since it involves Russian equipment and several companies,” he added.



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