Maputo — The Mozambican oil company Oilmoz on Tuesday announced that it has secured funding from a sovereign trust in the United States to build a refinery capable of producing 350,000 barrels a day.

Construction is expected to begin next year and could be completed by 2018.

The project will integrate a refinery, petrochemical plant, storage tanks, a gas fired power station, pipelines, desalination and water treatment plant, a waste disposal plant and an industrial park.

Currently Mozambique is totally dependent on the import of refined fuels, which costs the country about 700 million US dollars a year. According to the Chief Executive of Oilmoz, Fausto Cruz, the refinery would cut the imports and reduce these costs substantially.

Cruz told AIM that the country currently consumes about 20,000 barrels per day. Thus the Oilmoz refinery would be able to supply not only Mozambique, but also neighbouring countries with refined fuels.

Five years ago, the government approved projects for two refineries.

Approval was granted in 2007 to build a refinery in Nacala-a-Velha, in the northern province of Nampula, which would have cost five billion US dollars.

The Oilmoz refinery was to be at Matutuine in Maputo province in southern Mozambique at an estimated cost of eight billion dollars. However, Fausto Cruz told AIM that “Oilmoz is studying another location which will be better suited for the environment”.

He said that funding of up to 17 billion dollars has been guaranteed under the agreement.

The company will also fund social projects which will be carried out by the Joaquim Chissano Foundation.