SINGAPORE BASED Leighton Offshore Pte has been contracted to undertake a Tsh111.6billion ($70 million) project to replace the old crude oil discharging terminal with a new dual pipeline single point mooring.

The project which was contracted earlier this year by Tanzania Ports Authority will also include construction of a 3.6 kilometre offshore pipeline and a 4.3 kilometre onshore pipeline for white petroleum products and crude oil respectively.

Energy and Water Utilities Regulatory Authority, principal communications and public relations officer, Titus Kaguo said this was a good development because the single port mooring was one of the issues stakeholders who were opposed to bulk procurement cited as a weakness.

“We applaud the Tanzania Ports Authority management for taking such positive steps in rectifying the single port mooring issue. We expect the discharge of products to be much faster and the volume to increase,” said Mr Kaguo. During the process to introduce bulk procurement some stakeholders in the sector were opposed to the idea, saying the the Ports Authority was not ready for the new system.

Mr Kaguo said the installation of the dual pipeline single point mooring will also work towards reducing demurrage and attract more players.

According to industrial observers, fuel pump prices will significantly fall by next July when construction of Tanzania Ports Authority’s 150,000 metric tonne oil discharging terminal at Dar es Salaam port is completed to replace the 40,000 tonne Kurasini Oil Jetty.

The Swiss based firm which first won the bulk procurement tender last November and January to supply 540,000MT and 600,000MT of petroleum products worth Tsh1.8 trillion ($1.1 billion) covering months of January to April, has been criticised for failing to bring down fuel prices.

Swiss based Augusta Energy SA managing director, Giuseppe Nestola said the costs associated with importation and discharging of fuel at the country’s prime port will fall significantly by between $10 and $15 per metric tonne.

“Currently costs are high because the oil discharging pump is small and therefore tankers spend more time at the port and we pay Tsh31.4million ($20,000) per day per ship in delay fees,” said Mr Nestola responding to criticism that bulk procurement has caused the country Tsh11billion ($7million) loss in the past two months.

Augusta, which will supply the 640,000 metric tonnes of petroleum products has also been criticised for supplying substandard oil which has affected supplies in the market this month.

“World market prices for oil have increased to $130 per barrel from $80 a year ago,” Nestola argued although he expressed optimism that China’s economic slowdown and Europe’s debt crisis will reduce demand for the commodity at the world market forcing prices down this year.