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South Sudan eyes Kenya export pipeline link

The pipeline link would provide an alternative to the transit fee currently paid by South Sudan

South Sudan is once again considering building an export pipeline through Kenya, saying such a link would be “more economical” than the $32 a barrel transit fee Khartoum is demanding it pay for access to its trunkline and export facilities in Port Sudan.

Pagan Amum, secretary general of South Sudan’s ruling Sudan People’s Liberation Movement (SPLM), told reporters at a mining industry conference in Perth: "We are having conversations. We are looking to the alternatives."

He acknowledged that any East African pipeline was some years away.

Industry experts believe it could take between three to five years at best before a pipeline from South Sudan to the Kenyan coast would be operational. South Sudanese energy officials have also admitted that until such a link is built, the new country is reliant on Sudan to get its oil to market. South Sudan has no railway and, in a country with an area of 640,000 square km, there are just 60 km of paved road.

Amum’s comments came as the African Union once again attempts to broker a compromise over infrastructure access between Sudan and South Sudan, which seceded from the north on 9 July. Before South Sudan’s independence, Sudan pumped 500,000 barrels of oil a day, 75% of which is produced from fields that now lie in South Sudan. However, the regime in Khartoum controls the country’s only export pipeline, refineries and port.

Ahead of independence, officials from Khartoum and Juba attempted to come to agreement over access to Sudan’s export pipeline, but the talks broke down without resolution.

"We believe if Khartoum accepts a deal, it would be in the interests of both Khartoum and the South," Amum said, adding he believed international mediators would encourage Khartoum to be reasonable in negotiations.

Amum said South Sudan would not agree to pay higher transit fees to Sudan for its 380,000 b/d output. At present, it pays $4/b for production from existing fields and $7/b for output from new fields.

Khartoum is insisting on a levy of $32/b, a fee which would earn it an estimated $40 million a year – the amount of annual oil revenue it lost with South Sudan’s secession.

Meanwhile, fighting erupted in Sudan's Blue Nile border state  between the army and forces loyal to the border state’s governor Malik Agar, chairman of the SPLM-North, Sudan’s main opposition party.

This morning's attacks follow a troop build-up in Blue Nile and warnings that conflict in nearby South Kordofan – Sudan’s only oil-producing state - was likely to spread along the border with South Sudan.

"In a new upsurge of aggression and in an extension of what happened in South Kordofan, forces allied to the Popular Defence Forces and the Sudanese Army instigated an all-out attack on the positions of the Sudan Peoples' Liberation Army (SPLA) in (the town of) Damazin" early Friday, Agar's SPLM-North party said in a statement.

The SPLM-North said tensions had escalated in the past four days because of the Sudanese army's large-scale troop and weapons deployment in Damazin.

Army spokesman Sawarmi Khaled Saad confirmed fighting had erupted in Blue Nile, but told reporters the SPLA was responsible for the conflict.

Since South Sudan’s secession in July, Khartoum has sought to shore up its authority within its new borders. Blue Nile and South Kordofan, which both lie in Sudan, have large numbers of SPLM supporters.

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