SOUTH SUDAN has agreed with eastern neighbour Kenya to build an oil export pipeline, a move that would allow the country to divert its exports eastward without relying on Khartoum’s controversial pipeline.
Barnaba Marial Benjamin, a spokesman for South Sudan’s government, said construction of the pipeline would begin “as soon as sources of funding are made available,” which should take about a month.
The agreement would allow the development of an oil pipeline and fibre optic connections between the oil fields in South Sudan and the Kenyan port town of Lamu.
The agreement Tuesday was witnessed by South Sudanese President Salva Kiir and Kenya's Prime Minister Raila Odinga.
“The pipeline will be developed through Kenyan territory and will be built and owned by South Sudan,” a statement from Odinga’s office read. “The two countries will negotiate and agree on transit fees for the oil pipeline.”
Juba is caught in a bitter row with its northern neighbour Khartoum over pipeline transit fees of oil produced from the south but is exported from Port Sudan in the north.
Sudan, which runs the pipeline, has accused the south of not paying the transit fees and responded by seizing Juba’s crude to compensate for “unpaid fees.”
South Sudan ordered to shut in crude production last week in response to Khartoum “looting” US$815 million worth of oil exports.
Benjamin said the need for a new pipeline has taken on added urgency since South Sudan started on January 22 to shut down oil production because Khartoum is confiscating its crude and demanding a transportation fee of US$32 a barrel.
South Sudan took control of about three-quarters of Sudan’s output of 490,000 bpd when it gained independence in July. The crude is pumped mainly by China National Petroleum Corp (CNPC), Petronas of Malaysia, and India’s ONGC Videsh.
Negotiations between the two countries in Addis Ababa, the Ethiopian capital, have been extended until “some kind of agreement” is reached on how much landlocked South Sudan will pay to transport its oil across Sudan to the Red Sea, Benjamin said.
Oil News | East Africa
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