The Tanzania government on 27th January signed a Memorandum of Understanding (MoU) with a United Arab Emirates (UAE) firm for the construction of petroleum receiving and storage infrastructures.

The deal was signed by the Ministry of Energy and representatives of the UAE-based Emirates National Oil Company Group (ENOC).

The decision aims at making Tanzania a petroleum hub in East and Central Africa as well as sustaining the country’s fuel demands for up to 6 months.

Speaking during the event, the minister for Energy, Mr January Makamba, said the new infrastructure will reduce delay times for offloading of oil products, especially on transit to neighbouring countries.

“The current Petroleum Act requires the country to have enough petrol for utilization for 15 days, but currently the storage enables us to sustain for 30 consecutive days. Much should be done to increase the country’s storage capacity,” he said.

Minister January Makamba who doubles as Bumbuli legislator said oil importation at the port of Dar es Salaam utilizes one pipeline, leading to failure to support the amount of imports.

This leads to shipping delays of up to 18 days, which trigger an increase in the price of the product, according to the minister.

“Hopefully, the two sides will come up with an agreed investment contract worth between $400 million and $500 million in the next 2 to 3 months,” he said.

The ENOC Group chief executive officer, Mr Saif Humaid Al Falasi promised to cooperate with the government in resolving challenges facing the energy sector in the country.

“The current infrastructure will help us in the estimation and negotiation processes with the government. We have the experience to carry such projects to other countries like Morocco, Djibouti, Malaysia, and Dubai,” he said.

The Tanzania Association of Oil Marketing Companies (TAOMAC) executive director, Mr Raphael Mgaya, said the project will improve the efficiency of oil business in the country as well as its transit to neighbouring countries.