Zimbabwe is considering a $850 million investment proposal by a United Kingdom (UK) oil firm, Coven Energy Limited to construct the country’s second fuel pipeline.
The Zimbabwe Investment Development Authority (Zida) says the deal entails that Coven Energy will form a joint venture (JV) company with state-owned National Oil and Infrastructure Company (Noic) to construct a second fuel pipeline linking Beira to Zimbabwe.
The company also plans to connect the pipeline to South Africa, Botswana, Zambia, Malawi, and the Democratic Republic of Congo (DRC) in the long run.
The deal is expected to radically transform Zimbabwe into a regional petroleum hub, while tilting the dynamics of the local industry largely dominated by Sakunda Holdings owned by business mogul Kuda Tagwirei.
Coven Energy plans to roll out the project in phases, with the first stage set to receive an $850 million capital injection if the deal is approved by President Emmerson Mnangagwa.
Earlier plans to set up a second pipeline were frustrated by the cabinet after South African-based Mining Oil and Gas Services (Mogs) approached the government.
In the latest investment proposal, Coven Energy’s involvement of Noic is expected to give the bid impetus, although the buck stops at the President’s desk.
Noic chairperson, who is also Zanu-PF Midlands chairperson Daniel Mackenzie Ncube, explained that he would not comment as negotiations were at a “critical” and delicate point.
Vice President Constantino Chiwenga is said to be opposed to plans to set up a second pipeline while president Mnangagwa has thrown his full weight behind the Coven Energy deal.