Tanzania plans to start a strategic petroleum reserve (SPR) at the Tanzania Italian Petroleum Refinery (Tiper) by January.
But the government and Swiss company Oryx Energies, who jointly own Tiper, have differed on who should manage the reserve.
Ministry of Energy and Minerals resource commissioner Stanley Malisa said they were in negotiations with the Tanzania Petroleum Development Corporation (TPDC), which has the mandate to manage the storage facility, and an Omani company on when to start supplying the reserve.
“The plan is to have at least 50,000 metric tonnes stored monthly once the SPR kicks off,” he said.
According to Mr Malisa, the Petroleum Act of 2008 stipulates that the government should have a strategic petroleum reserve under TPDC management immediately.
He added that some of the Tiper tanks were currently undergoing renovation.
Mr Malisa said the bone of contention between the government and Oryx is that when the latter acquired its 50 per cent stake, the agreement was that it would manage the facility while the government remained a silent partner because, back then, Oryx had experience and expertise in managing refineries.
However, since Tiper stopped refining and became a storage facility, the government feels that it would be in the interest of both parties to change the management, currently under Oryx, to an independent one.
The government sent a draft copy of its recommendations to Oryx mid last year seeking to sign the new agreement, but Oryx responded disagreeing to the clause on independent management.
Negotiations are ongoing and the minister said this would not affect the SPR once it takes effect as all decisions will be under TPDC and logistics will be handled by Tiper under its current management until they come to a decision.
Tiper managing director, Daniel Belair said that he could not comment on the matter as the decision on independent management was currently under discussion between the two.
Tiper is a former refinery that has been turned into a modern tank farm providing mass storage to all trading and marketing companies looking for storage capacity.
It is one of the largest bulk import and storage sites in sub-Saharan Africa, with an overall storage capacity of 150,000 metric tonnes and a further 100,000 metric tonnes under rehabilitation.