South Sudan ‘picks Kenya pipeline’

South, Sudan, ‘picks, Kenya, pipeline, trade, partner, Makana, anthony, Juba, Ethiopia, Djibouti, South-Eldoret-Mombasa

Fractious relations in Sudan are set to be tested further as the soon-to-be independent South appears to have chosen Kenya as a trade partner for its rich oil reserves

 

The apparent pledge to hook up to a Kenyan pipeline may cause major disruption to oil production in the lead up to the weekend when the world will get its newest country.

South Sudan is due to break away from current day Sudan following a referendum months ago. Sudan’s President, Omar Bashir, recently threatened to turn the taps off on oil production from the South if it did not accede to demands to guarantee the North a cut of future oil revenues, or payment for using its downstream infrastructure.

Anthony Makana, the South’s incoming Minister of Roads and Transport, said that the country will build a 200 kilometre-long pipeline to hook up with the South-Eldoret-Mombasa pipeline in Kenya, according to a Reuters report.

Pipeline talks

"To build a pipeline is a very easy thing for us," Reuters quoted him as saying in the South’s capital, Juba.

The South is already in talks with a number of firms about constructing the pipeline which Makana reckons can be built for a “few million dollars”, according to the news wire.

The idea of exporting oil from the South through Uganda and Kenya has been floated, as has the idea of routing a pipeline through neighbouring Ethiopia and on through Djibouti.

Peace deal terms

South Sudan holds three quarters of current day Sudan’s oil but is reliant on refinery and port infrastructure in North Sudan for export and, thus, oil sales.

Under the terms of a 2005 peace deal that ended decades of civil war with the north, South Sudan keeps half the revenues from oil drilled in its territory. However, as the deadline for secession draws near, the north is anxious to hammer out a deal to secure its financial future.

"I give the south three alternatives for the oil,” Bashir said at a rally in Khartoum in late June.

"The north is to continue getting its share, or the north gets fees for every barrel that the south sends to Port Sudan. If they don't accept either of these, we're going to block the pipeline."

Sudan began exporting crude in late 1999. In 2009 it was estimate to be producing 486,700 barrels per day, putting it at 31st in the world in terms of producing countries, according to CIA information.

It has proven oil reserves of 6.8 billion barrels as of last year placing it number 20 on the world list, according to the CIA. Proven natural gas reserves last year stood at 84.95 billion cubic metres, according to the data.

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