Investors Watch As Zambia Decides On Refinery Sale - Africa’s premier report on the oil, gas and energy landscape.

Investors Watch As Zambia Decides On Refinery Sale

South Africa’s synfuels giant Sasol and India’s Essar Group are two of several companies known to be waiting in the wings, as the Zambian government takes a decision on selling stakes in the Indeni Refinery sometime in March 2010.

The government would also, on that date, decide whether to divest the refinery along with the 1,300km Tazama pipeline that brings crude from Dar es Salaam port in Tanzania.

Indeni Refinery has a capacity to refine around 1 million tonnes per annum (MTPA) of crude, but the current configuration allows separation of only diesel and LPG. The firm that gets the refinery will have to invest money, no less than $l50Million for refurbishing and augmenting refining capacity as its current configuration.

Sasol, which already converts imported gas from Mozambique to petrochemical products in South Africa, will use the refinery to further its petro-product footprint on the continent. Meanwhile, Essar, which has acquired the Mombasa refinery in nearby Kenya,  plans to use the refinery, one of the few inland refineries in Africa, to supply petroleum products to the Democratic Republic of Congo, Malawi, Zambia and even East Angola.

Currently, the liquefied petroleum gas (LPG) produced at the refinery goes to Kenya by road. Essar plans to take petroleum products instead of LPG to Mpulungu harbour in north Zambia, which is located on lake Tanganyika, and then supply it to countries such as Libya, Kenya, Tanzania, Burundi and some East African countries by ship as the lake connects all these countries.

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