Malawi Government has increased the proportion of gas in the energy mix from one percent to eight percent and it follows the implementation of the energy sector reforms.
National Oil Company of Malawi (Nocma) chief executive officer Robert Mdeza confirmed the development last week.
Previously, before the energy sector reforms were instituted, gas had a one percent share in the oil and gas industry, and only one importer was a major player in supplying a small proportion of gas, especially industrial gas, into the country.
But with the increase to eight percent, more investors will be allowed to supply gas, as the country is looking for alternative sources of energy due to the current electricity challenges.
According to Mdeza, the move is expected to create opportunities for new businesses in the oil and gas sub-sector.
“There is need for the country to have a quick study of the gas sub-sector on expanding the handling facilities as one way of courting investors following the current energy reforms which have since increased the proportion of gas in the energy mix from one percent to eight percent.
“Malawi has one major supplier of gas, but there is need for new players to come in and increase supply and outreach to make sure that they can go as far as the rural communities,” he said.
On the petroleum products front, Malawi is also planning to boost its fuel storage capacity. Currently, the country has reserves that can store up to two months of fuel supplies.
But government plans to bring in an investor for the pipeline which is estimated to cost about $186 million (about K135 billion).
However, government is yet to find an investor for the pipeline.
In an interview on Tuesday, Ministry of Energy, Natural Resources and Mining spokesperson responsible for energy issues Joseph Kalowekamo told Business News that government is yet to find an investor for the pipeline although there are hopes of getting one soon.
“An investor has not yet been identified. But I need to get an update as there was one investor that came a few weeks ago and met our Minister and Minister of Transport and Public Works,” he said.
However, Mdeza said that Malawi being a hinterland country, building a pipeline would be much easier if it was a regional project.
“If we are to build a pipeline, we would have to build it with Mozambique but even Mozambican consumption combined with our consumption would not necessarily justify that investment. We need to look at it very seriously with Mozambique, DRC and Zambians to put up together a pipeline for the region.
This is because pipelines are an expensive project, it costs about $1 million (K730 million) to construct a kilometer, but because our consumption is very low, you may find that the pipeline is idle most of the time as it would pump fuel for five months and remain idle for the rest of the time.
That is why we are saying we need to make this a regional project just like we are talking of interconnection of the power side,” he said.
Once implemented, the project is supposed to reduce transportation costs, delays in delivery of fuels and prevent theft of fuel by some transporters.
Malawi currently imports more than 90 percent of its oil products via the ports of Beira and Nacala, in tanker trucks, whilst the remainder arrives through Dar-es-Salam in Tanzania.