Guest Contributor | Nov 14, 2022 | 0
Namcor officially takes control of national oil storage facility
The National Petroleum Corporation of Namibia (Namcor) has now successfully taken charge of the country’s multi-million-dollar National Oil Storage Facility, which consists of a tanker jetty, multiple product pipelines and a terminal consisting of seven tanks with a capacity of 75 million litres.
The construction of the facility commenced in January 2015 and was officially handed over to Namcor on 1 March 2021, by the Ministry of Mines and Energy.
Cabinet took a decision in 2019 that Namcor will operate and maintain the facility upon completion after considering several international bidders who were also interested in operating and managing it.
Namcor’s official take over of the facility was announced on 29 March by Namcor’s Board Chairperson, Jennifer Comalie, who said that the facility was designed and constructed as a strategic storage facility with the primary aim of increasing Namibia’s security of fuel supply from the previous 7-10 days to 30-45 days in situations where the country will be unable to import petroleum products from the international market.
“A decision was made to convert it to serve as a commercial storage facility, in addition to the strategic storage imperative, to make sure product is continually used and replenished,” Comalie said.
Comalie added that Namcor recruited and trained competent Namibian staff that in the process also assisted government with the completion and commissioning of the facility.
“We are proud that Namcor was instrumental in advising Government to convert this facility from merely a strategic storage facility to a National Oil Storage Facility that will be operated on commercial principles while still obtaining its objectives of strategic fuel security,” said Comalie.
Namcor Managing Director Immanuel Mulunga explained that commissioning the facility meant bringing in fuel equivalent to the capacity of the terminal in order to test the operation of the jetty, pipelines and tanks and various systems.
“As per the Operatorship Agreement between the Ministry of Mines and Energy and Namcor, the latter was to supply the commissioning stock and on-sell it to its customer base once commissioning was completed,” Mulunga said.
He added that the commissioning strategy was carried out with the approval of the Namcor Board, the Ministries of Mines and Energy and Public Enterprises, having followed the due procurement process in procuring the commissioning stock.
The facility will not only be used for Namcor’s own trading purposes, but also to host other international oil marketing companies such as Vitol, Gunvor, Vivo and Total to ensure that it is utilized optimally and that Namibia becomes a strategic gateway through which neighbouring African countries are supplied.
Mulunga stated that the first shipment of commissioning stock arrived on 1 December 2020, which heralded the testing and commissioning of the facility. The commissioning stock was valued at N$407.3 million and consisted of approximately 37 million litres of Diesel (ADO), 21 million litres of Unleaded Petrol (ULP) and 9 million litres of Low Sulphur Fuel Oil (LSFO) (5 million litres of this went for commissioning while the rest went into our existing HFO tanks).
The procurement of this fuel was funded by Namcor with extended payment terms from Namcor suppliers in order to assist the owner (National Energy Fund) with the commissioning of the facility.
So far, Namcor has already begun to successfully sell the commissioning stock to its retail, commercial, bunkering and export customers, as well as other local marketing companies with success. The company has also realized a total revenue of N$152 million on the three products sold, since commissioning.