The National Oil Infrastructure Company of Zimbabwe (NOIC) is in discussions with Triangle Limited to form a joint venture company for the production of ethanol.
This comes as Government recently liberalised ethanol production following perennial failure by Green Fuel to adequately supply the market particularly during wet seasons.
The inadequate supplies from Green Fuel forced Government, in March, to revise downwards the mandatory blending level of unleaded petrol with ethanol to 5 percent from 15 percent.
NOIC public relations officer Loku Tshaka told The Herald Business that discussions over a joint venture with the Lowveld sugar producer were ongoing but at present the state-owned entity was procuring ethanol from Triangle through an interim arrangement. Government has in the past augmented Green Fuel supplies through Triangle.
“NOIC has just commenced the sale of ethanol and this has been complimentary to the ethanol suppliers from Green Fuel,” said Ms Tshaka.
Under this structure, NOIC has sold a total of 14,6 million litres of ethanol since November 2016.
NOIC is also constructing an ethanol storage and handling facility of 3 million litres at Mabvuku Depot.
“The project has commenced and is expected to be complete by December 31, 2017.”
Ms Tshaka said NOIC currently has a total storage capacity of 540 million litres of combined petroleum product at its depots around the country.
“All the storage capacity is currently active.”
Ms Tshaka last year told The Herald Business that NOIC will pursue the expansion of its market by making Zimbabwe the regional hub for the distribution of petroleum products.
In order to ensure security of supply of fuel, in addition to servicing regional markets, the company increased the capacity of the Feruka pipeline through the introduction of a drag reducing agent in 2013, which increased the flow rate from 120 million litres per month to 180 million litres per month.
Ms Tshaka said the long term plan for NOIC is to continue operating profitably while giving an efficient service to the industry.
The oil company is also pursuing the construction of a Liquefied Petroleum Gas storage facility.