VANCOUVER-based DiamondWorks Ltd has announced that its wholly-owned subsidiary Petroplus Africa has entered into a memorandum of understanding (MOU) to obtain financing and arrange for the construction of an oil pipeline and ancillary storage facilities from the port of Nacala in Mozambique to Liwonde in Malawi. Upon obtaining initial financing commitments for the Projects, Petroplus will be appointed to arrange and provide fuel supplies and petroleum products to Malawi. The MOU was entered into in late April by Petroplus with the Malawian Ministry of Natural Resources and Environmental Affairs.
The MOU grants Petroplus the exclusive right for a period of six months from the effective date to carry out the due-diligence necessary to arrange financing for the construction of approximately 400km of pipeline from Nacala to Liwonde, which lies roughly equidistant between the two principal cities of Blantyre and Lilongwe. The new storage facilities to be constructed are to be of sufficient capacity for at least two months feedstock requirements for Malawi, or approximately 60,000 tonnes of refined oil products. In the event a financing commitment is secured by Petroplus during the initial six-month period, the MOU will be automatically extended for an indefinite period.
Petroplus will work closely on the due diligence and financing proposal with Petroplus International Marketing FZCO (Petroplus International), a wholly-owned subsidiary of Petroleum International NV, one of Europe’s leading midstream oil companies and tank-storage operators based in the Netherlands. Petroplus International is responsible for the procurement and financing of crude oil and certain refined products on behalf of DiamondWorks, and is also the supplier of petroleum products to Otterbea International under its Zambian crude oil contract. Discussions with various financing institutions are relatively advanced, and the company has received positive initial reactions from ABSA Bank and other potential financiers.
DiamondWorks Ltd is a Canadian company listed on the Toronto Stock Exchange that holds interests in extensive diamond projects in Sierra Leone, Angola, and the Central African Republic and, through its subsidiaries, specializes in procurement and logistics into the African continent. The Company maintains a substantial infrastructure throughout sub-Saharan Africa, and provides comprehensive services to the mining and other industries.