The challenge faced in Namibia’s oil transportation is inefficiency in rail operations, which results in significant haulage continuing to be moved by road tankers, Puma Energy Namibia said in a report.
The report said the challenge for Namibia, therefore, is to improve the efficiency of the rail network to attract volumes that are currently being trucked inland.
The report added that railage rates between Walvis Bay and Windhoek are US$22 per cubic metre compared to US$24 per cubic metre by truck, where transporters typically benchmark their rates against the rail rates since the railage rate sets the recovery in the price structure.
The Trans-Kalahari Railway project envisages a 1,500km rail link between Walvis Bay, Gaborone and the mining district northeast of Gaborone near the South African border.
Puma Energy said liquid fuel volumes would not justify this investment without the accompanying mining tonnage. Railage rates could be in the region of US$115 per cubic metre compared to US$146 per cubic metre to road, across the same distance.
Namibia’s fuel terminal is based in Walvis Bay and generally, all transit volumes and offshore volumes move through this port.
Puma Energy said if 100% of the Zambia and Botswana demand currently moving through other supply chains shifts to the Walvis Bay corridor today, then the berths would already be constrained. The report said if such a switch were to happen, berth capacity would need to double by 2040, with subsequent investment in gasoline and gasoil tankage as well as gantry capacity.
The report indicated that in 2022, approximately 28,000 truckloads of clean products left the port and the forecast is to grow by 65% to 46,100 loads by 2040.
In terms of pipelines, Puma Energy said if the full Botswana and Zambia volumes all shifted to the Walvis Bay corridor, a 1,500km 14” pipeline would be required to carry this volume to Gaborone out to 2040 and beyond. The capital cost of the line would be US$1.3 billion, requiring a transport fee of US$110 to US$125 per cubic metre based on a 20% cost of capital and a 15-year payback.
The report noted that the road bridging rates over the same distance are currently US$105 to US$125 per cubic metre, making such a pipeline viable. However, since most of the demand is concentrated between Walvis Bay, Windhoek and Lüderitz, a network of smaller lines is likely more optimal, the report said.
Puma Energy noted that Namibia’s supply chains are uncongested. The main port of Walvis Bay has additional capacity open to it, and evacuation from the port to the hinterland is unobstructed, it said.
The report said efficiency gains are possible through increased uptake of rail, which would be key in displacing trucks from the road as volumes for the Namibian and transit markets continue to grow over the forecast period.
By: Chamwe Kaira, for Railways Africa Magazine
