Petroline postpones construction of oil pipeline linking Mozambique to South Africa

18 August 2011

Johannesburg, South Africa, 18 Aug – South African company Petroline has decided to postpone construction of an oil pipeline linking Mozambique to South Africa alleging that South African company Transnet benefits from favourable government treatment, according to South African newspaper Daily Business.

The director of Petroline, Pinky Moabi, confirmed to the newspaper that the project had been suspended whilst negotiations were underway with the South African government.

Moabi also said that the decision was related to the structure of fuel tariffs followed by the South African energy sector regulator, which is considered to be negative for private operators and to favour state company Transnet.

In March 2007, the National Energy Regulator of South Africa (Nersa) granted Petroline a license to build an oil pipeline between Mozambique and South Africa, passing through Nelspruit, where fuel storage tanks would be built, as well as through Kendal, where the pipeline would be linked to Transnet’s network of oil pipelines.

The newspaper said that Petroline’s decision was a setback for investments by the private sector in oil infrastructures, as well as to the introduction of competition into fuel transport via pipelines, controlled by Transnet Pipelines, a subsidiary of Transnet.

The decision is also a setback for other organisations involved in the project, namely “Women in Oil and Energy SA” and Mozambican state company Petróleos de Moçambique. (macauhub)