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Jul 06, 2007

Pipeline project, Mozambique and South Africa

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Name and location
Mozambique-South Africa pipeline project.

Project description
The project will involve the construction of a liquid petroleum pipeline from the border of Mozambique at Komatipoort, to Kendal, through Nelspruit.

The pipeline will run from an existing coastal fuel-storage facility at Matola harbour, in Mozambique, to the Nelspruit area, in Mpumalanga, South Africa, where an inland storage depot will be constructed, complete with rail-and-road offloading infrastructure. The pipeline will then continue to Kendal, where it will potentially join the current Petronet petroleum pipeline network for inland distribution of the petroleum product.

Value
The project is expected to cost an estimated R4,2-billion.

Duration
The project is expected to be on line before the end of 2009.

Breakdown of main contracts
None stated.

Client
Petroline RSA will implement the project in a 50:50 joint venture with Petroline SARL of Mozambique. Petroline RSA has four main shareholders: Woesa Consortium, Gigajoule International, Petróleos De Moçambique, and Companhia De Desenvolvimento De Petroleo Moçambique SARL.

Latest developments
Petroline Holdings (Petroline) has announced that subsequent to the award of a construction licence by the National Energy Regulator of South Africa (Nersa), to Petroline RSA in March 2007, Petroline has been able to maintain project development as scheduled and is confident that the multiproduct petrol and diesel fuel pipeline can be operational before the end of 2009.

Petroline has appointed VGI Consulting Engineers to lead the technical design. They have now completed the route investigations and route corridors determination. The conceptual designs of the pipeline, pumpstation, and storage depot are almost complete.

Petroline has appointed Nature & Business Alliance Africa to coordinate and manage the environmental-impact assessment (EIA) processes, the land servitude acquisition process, and the public consultation process for the project, in both South Africa and Mozambique.

Two EIA processes are required for the South African portion of the project. The first EIA relates to the liquid fuels pipeline and associated pumpstations from the South African/Mozambican border to Kendal, and the second relates to the fuel storage depot near Nelspruit.

For both South African EIAs, the environmental regulating authority is the Mpumalanga Depart-ment of Agriculture and Land Administration (MDALA). Petroline has appointed SRK Consulting to act as the independent EIA prac-titioner to conduct the EIAs. Further, Petroline has appointed Matrix PR & Communications Consultants to conduct the public consultation process as part of the EIA processes.

Petroline is also conducting two EIAs for the Mozambican portion of the project. The first EIA relates to the pipeline and associated pumpstations from the Matola harbour to the Mozambican-South African border. The second EIA relates to the upgrading of the storage depot in Matola.

To comply with Mozambican environmental regulations, Petroline has appointed Projectos e Estudos de Impacto Ambiental, Lda (Impacto), a Mozambican environmental consulting firm, to act as the EIA consultant for both Mozam-bican EIAs.

For the South African side of the project, the EIA practitioner has completed an environmental screening of the pipeline corridor.

Petroline has identified various locations for the storage depot facility in Mpumalanga and is nearing the completion of an environmental screening of each of the locations.

The Mozambican EIAs are expected to start within the next few weeks.

Petroline has begun the process of registering interested and affected parties and is scheduled to hold the first public open information days in late July 2007.

Mozambican port and railroad company Caminhos de Ferro de Moçambique (CFM) has started the process for the refurbishment and upgrading of the Matola oil terminal. The refurbishment and upgrade will ensure that the infrastructure at the Matola oil terminal will meet the increased capacity demands that the Petroline pipeline project will give rise to.

Meanwhile, it has been reported that the upgrade of the Matola fuel storage facilities at Maputo harbour are well advanced, and that the facilities could be ready to start allowing for rail and road deliveries of fuel to South Africa in a couple of months.

To meet the envisaged critical petrol and diesel supply shortages in Gauteng, Petroline has engaged with Petronet to facilitate the efficient integration of the Petroline pipeline into the existing Petronet network. Such integration is necessary for the efficient transportation of fuel from Maputo into the wider inland network.

Petroline also considers it important that the proposed Petronet liquid fuels pipeline between Kendal and Waltloo is completed by the end of 2009 so as to coincide with the completion of the Petroline pipeline.
Based on requests by several fuel importers, Petroline, with the support of its Mozambican partners and the authorities, is well-advanced with its planning for the early rehabilitation of the fuel storage facilities in Matola to facilitate road and rail imports into South Africa, even before the pipeline is completed.

Further, Petroline is expected to invite firms to bid for the engineering, procurement and construction of the pipeline in the next three to four months.

Participants
Nersa (construction licence), VGI Consulting Engineers (technical design), Nature & Business Alliance Africa (South African EIA processes, the land servitude acquisition process, and the public consultation process), MDALA (environ-mental authority), SRK Consulting (South African independent EIA practitioner), Matrix PR & Communications Consultants (South African public consultation process as part of the EIA processes), Impacto (EIA consultant for both Mozambican EIAs), and CFM (refurbishment and upgrading of the Matola oil terminal).

Construction materials
Not stated.

On budget and on time?
Too early to state.

Contact details for project information
Petroline Holdings, Johan de Vos,
tel (012) 682 9120.
Petroline RSA, Pinky Moabi, tel (011) 314 2101.
Petroline Mozambique, Casimiro Francisco, tel +258 21 356 615.

Edited by: Creamer Media Reporter
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