The National Oil Storage Facility at Walvis Bay, which has been marred by controversy due to an exorbitant escalation of funding requirements, is crucial for the security of petroleum products’ supply for Namibia. This is according to the National Petroleum Corporation of Namibia (Namcor), which explained how the facility has increased the country’s security of supply from two weeks to at least 45 days of storage capacity.
The facility, which was initially estimated to cost less than N$1 billion but for which over N$6 billion was eventually spent, allows the country to keep a given threshold of products in stock, particularly for situations where petroleum products cannot be imported from the international market.
“The country used to run on a two-week fuel storage capacity. This was quite risky, especially during high seasons in the oil market, taking into consideration that Namibia does not yet produce a drop of oil. It was also risky in case of any unforeseen eventualities either in South Africa or the oil-producing countries from which we source oil,” Namcor spokesperson Utaara Hoveka said.
In an exclusive interview with New Era, Hoveka explained how the 70 million litres’ facility effectively provides a measure of security for the 45 days to cater for any unforeseen crisis that could disrupt the importation of fuel.
The National Oil Storage Facility (NOSF) at Walvis Bay, which was officially handed over to Namcor in March last year, is the largest fuel storage facility in the country and the first-ever to be 100% government-owned and operated by its national oil company. Other existing fuel storage facilities in the country are owned by private oil companies.
Hoveka added that in addition to the NOSF, Namcor operates a 600 000 litre fuel capacity depot at the town of Otjiwarongo, and also has a storage facility at Mariental. Namcor furthermore has a 25% stake in a storage facility at Keetmasnhoop, and will soon be operating a 425 000 fuel capacity depot at Gobabis. The company likewise has plans to establish additional fuel depots at Ondangwa, Windhoek and Lüderitz.
Said Hoveka: “The construction or acquisition of depots is informed by a combination of factors, among them supply and demand, which includes considerations of current clientele and anticipated market share growth”.
Construction commenced on the NOSF at Walvis Bay in January 2015, and the infrastructure now consists of a tanker jetty, multiple product pipelines and a terminal consisting of seven tanks with the 75 million litre capacity. 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.
According to Namcor, the facility will be operated on commercial principles while still obtaining its objectives of strategic fuel security.
– ebrandt@nepc.com.na