THE ministry of energy will ensure there is transparency in the manner it is going to contract a new company to supply 1.4 million tonnes of oil for a period of two years starting this year.

The Zambia Public Procurement Agency announced the 1.4 million tonnes of petroleum feedstock should be in cargo lots of 60,000 to 120,000 tonnes plus or minus 10 per cent and delivered at evenly spread intervals.

The oil should be configured to Zambia's 24,000 barrels-per-day Indeni refinery, which does not process pure crude oil, meaning the quantum being sought by government for Indeni should be commingled Petroleum Feedstock under the Feedstock Supply Scheme.

"Bidders should note that they will be expected to supply the first cargo by July 2012 in Dar-es-Salaam," according to the documents issued by ZPPA.

"The preferred feedstock components in cargo compositions that meet design and present refinery configuration and the Zambian market demand shall be blend of standard export grade (SEG) crude oil, Straight Run Heavy Naphtha or Condensate and Straight Run Gasoil."

Currently, Zambia imports all its petroleum requirements, mainly from the Middle East, through the port of Dar-es-Salaam in Tanzania.

The procurement agency will hold a pre-bidding meeting for all interested suppliers in Lusaka on February 29, it said.

Zambia previously contracted global trader Glencore to supply
feedstock under a two-year contract from March 2010.

Next month, Glencore Energy UK Limited is expected to deliver to Zambia the last shipment of 90, 000 metric tonnes of commingled oil, bringing an end to the two-year contract it was controversially awarded in March 2010.

According to sources close to the crude oil supply tender process, the government awarded the contract to Glencore Energy UK Limited, which was the fourth best ranked bidder, after abandoning plans to engage Russia's LITASCO following public outcry that ensued subsequent to The Post's expose'.

The awarding of a crude oil supply contract to Glencore Energy UK Limited led to Zambia losing US $32million.

Separately, energy minister Christopher Yaluma said the government wanted to engage a company to replace Glencore Energy UK Limited but would continue to pursue other means of lowering fuel costs in Zambia.

"We will see how we can drop the higher overheads on the petroleum chain, so, we are saying we are just going out on tender but that's not the end in itself," said Yaluma in an interview from Kasama.

"We are doing things concurrently; we are going out on tender and also trying to see which other means can we procure fuel. So, the tender might not be the only one because there are other suggestions. So, what we are saying is that 'yes you are out of tender, the contract would soon be coming to an end and we must get some company in place. It should be transparent. We want to do a good job."