Zambia has resumed operations at its sole oil producer Indeni Petroleum Refinery which was shut down for routine maintenance an exercise which cost the government more than USD 19 million.
Mr Mr Kenneth Konga energy minister of Zambia said that the 24,000 barrel per day producer of refined petroleum products was shut down for 45 days and re opened on November 17 was now expected to operate more efficiently after the annual refurbishment.
Zambia, recently acquired the other 50 % equity that was owned by Total Finale international in the refiner for USD 5.5 million after the company pulled out of the venture two years ago. It has since decided to accumulate all the 100% shareholding in the company in a move believed would make the organization more viable both in management and operations.
Some foreign companies have expressed interest to acquire equity in the refinery, a move the government said needed to be decided before offloading some shares and change the current status of the company 100% state wholly owned.
Mr Konga told journalists in Lusaka on November 22 that government was working out modalities in which some of the shares being sought by some foreign companies would be disposed of. Meanwhile, government has initiated plans to build strategic reserves in various parts of the country for petroleum products to avert shortages in the country in the event of closure of Indeni Oil Refinery.
He said that when Indeni refinery was recently closed for maintenance, government assured of constant supply of the product after it direct Oil Marketing Companies to start importing the finished product. The country will have more than adequate stocks of petroleum products during the shutdown.
Mr Konga said that the shutdown will not compromise the availability of petroleum products. Due to a continuous build-up of stocks through local production and imports, there will also be sufficient fuel during the 2010 periodic maintenance refinery shutdown from September 1 to October 15 2010.
He said that the refinery cannot continue operating without adequate storage space as these results in recirculation of processed products to the feedstock storage facilities which is an additional cost to the refining process. The refinery has currently run out of operational storage space due to depressed demand for petroleum products which is characteristic of rainy seasons when open pit mining activities and road construction significantly reduce.
Mr Konga said at the time of the shutdown that stock levels of petroleum products at the fuel terminal and Indeni Petroluem Refinery are 54,643,000 liters for diesel which is sufficient for 50 days of national consumption at current daily consumption. There are 10,425,000 liters of low sulphur diesel which is enough for 70 days of national consumption at daily consumption. The terminus has 13,717,000 liters of petrol which is equivalent for 20 days of national consumption at current daily consumption.
He said that there is 3,672,000 liters of Jet A1 which is enough to last 25 days and kerosene supplies are at 2,029,000 liters to last 41 days. The refinery has currently run out of operational storage space due to depressed demand for petroleum products which is characteristic of rainy seasons when open pit mining activities and road construction significantly reduce.
(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)
