His Excellency Mr. Filipe Jacinto Nyusi, the President of the Republic of Mozambique, inaugurated this Thursday, August 29, 2024, at the Port of Beira, the two new platforms built by Companhia do Pipeline Moçambique-Zimbabwe (CPMZ), one in Beira (Sofala) and another in Maforga (Manica). The new platforms allowed CPMZ to increase the pipeline’s fuel pumping capacity from Beira to Feruka, in Zimbabwe, from the previous two million to the current three million cubic meters per year.

 

 

1. Company Profile

Companhia do Pipeline Moçambique-Zimbabwe, Limitada (CPMZ) is a Mozambican company that has been operating uninterruptedly for more than 40 years.

Throughout its history, CPMZ has benefited from healthy shareholder stability, harmony, and transparency in corporate governance.

The company was set up on the basis of two share capital quotas, allocated in almost equal parts to the state and the private sector. However, the state has entrusted the private sector with a small majority of the capital and the majority of the members of the Board of Directors, as well as the management of the company.

The company’s success has been guaranteed at the highest level by the stability and quality of its governance and the excellent institutional relationship between the private shareholder and the government.

CPMZ’s main objective is to satisfy Zimbabwe’s demand through a secure supply of refined petroleum products in the region, giving preferential access to Zimbabwe while creating added value for Mozambique’s economy; Zimbabwe, in turn, as CPMZ’s only client, has an obligation to maximize the use of CPMZ’s pipeline.

 

2. Shared vision with the Government of Zimbabwe

The CPMZ and the Government of Zimbabwe are driven by a shared vision of (i) ensuring that the pipeline between Beira and Harare becomes the preferred transporter of refined products to the Southern African hinterland and (ii) making Harare the reference fuel distribution hub for the hinterland.

In pursuit of this shared vision with Zimbabwe, CPMZ’s Board of Directors has committed to designing and implementing a project to gradually expand the installed capacity of its pipeline, in step with the levels of demand growth.

 

3. The strategic importance of the Beira Corridor

Given the importance of the port of Beira to this strategy, it is also important to highlight and applaud the close cooperation that currently exists between the CPMZ and CFM teams. In fact, the integrated assets of CPMZ and CFM are a critical part of the energy infrastructure of the central region of the Southern African Development Community (SADC) and their safe and efficient operation is fundamental to guaranteeing the energy security of Mozambique and the landlocked countries in the Beira corridor (hinterland), including Zimbabwe, Zambia, DR Congo and Malawi. Given the increase in demand for fuels at regional level, the importance of the port and associated infrastructure in the Beira corridor will increase. In this context, the Beira Corridor Master Plan – a document drawn up jointly by CPMZ and CFM in response to a request from Minister of Transport and Communications Mr. Mateus Magala – is particularly important. The aim of the Beira Corridor Master Plan is to coordinate investment and the commercial and operational activity of the respective assets in order to ensure that the Beira Corridor is the most practical and cost-competitive means of transporting fuel between the Indian Ocean and other markets outside of Mozambique.

 

4. The increase in capacity of the CPMZ pipeline

Today CPMZ celebrates another important milestone in the journey that began several years ago. In the middle of the pandemic when the future was uncertain worldwide, the CPMZ Board of Directors took the decision that led to the capacity increase that is now being inaugurated. Four years later, His Excellency Mr. Filipe Jacinto Nyusi, the President of the Republic of Mozambique, inaugurated the new pumping platforms, which will increase the pipeline’s capacity from two to three million m³ per year, not only making it possible to continue safely supplying the Republic of Zimbabwe through the Beira-Feruka-Harare pipeline, but also creating the opportunity to facilitate access for the hinterland countries, thus satisfying the SADC agreements in this regard.

The expansion project will increase the capacity and competitiveness of the pipeline from Beira, facilitating exports by truck from Harare. This will be a more efficient and cheaper alternative to transporting fuel by road from the port of Beira, making it possible to reduce the distance travelled by road operators by around 1,100 kilometres, as well as road safety.

The expectation with the increase in capacity is that it can contribute to increasing the competitiveness of the Port of Beira against competitive ports in the region, and contribute to road safety, substantially reducing truck congestion both in the Port and along the Beira Corridor.

 

5. The CPMZ expansion project

The platforms are part of phase I of the company’s capacity expansion project:

Phase 1 – Currently (subject of inauguration)

• Increase in capacity from 2,000,000m³ per year to 3,000,000m³ per year;

• Project began at the end of 2020;

• Consisted of the construction of two new pumping platforms in Beira and Maforga, as well as the replacement of the old pumps with new higher capacity pumps;

• The project is valued at just over 40 million dollars, financed by own funds and support from national banks;

• The project has contracted at its various construction phases:

I National workforce: 35

II Foreign labour: 02

III National contractors and service providers: 15

Meanwhile, the company is already working on the next phase of its expansion project and is currently about to launch the tender for the detailed engineering study:

Phase II – Next phase

• Increasing capacity from 3,000,000m³ per year to 5,000,000m³ per year.

• This will consist of building two extra satellite stations, one in Nhamatanda and the other in Messica;

• The project is at an advanced design stage  

It is important to note that Mozambique and CPMZ are already prepared to meet a demand of more than 5 million m³. In fact, when the demand for fuel from Zimbabwe and the hinterland countries justifies it, CPMZ will have a modern and robust oil infrastructure in full operation, simply by replacing the current 10-inch pipe with a larger pipe without having to stop pumping, as the company did in the past when it replaced the old pipe with the one currently in operation:

Phase III – Last phase

• Increase in capacity from 5,000,000m³ per year to the volume required

• This will consist of replacing the current 10-inch pipe with a larger pipe

• Replacing the pipe without stopping pumping and making full use of the existing infrastructure