Tuesday, March 13, 2012

South Sudan mulls river pipeline and trucks to export crude

12 Mar 2012
Source: AFP

JUBA: South Sudan is considering alternative oil export options including a pipeline down the Nile followed by trucking crude out on a drive of several days to port, officials said on Wednesday (7 March 2012).
The plans were unveiled as South Sudan holds African Union-led talks in the Ethiopian capital with neighbour Sudan to resolve a furious oil dispute with tension high between the two sides.

The two countries have been at loggerheads since the oil-rich South split from the north in July, threatening to reignite conflict between the two former civil war foes.

Juba took the drastic decision to halt its production in January, despite oil making up 98 percent of its revenue, after Sudan started seizing its crude destined for export failing a deal on transit fees.

"We are studying the feasibility of exporting oil via trucks from the oil fields to Djibouti," said Minister of Petroleum and Mining Stephen Dhieu Dau on Wednesday.

Djibouti, on the Gulf of Aden at the entrance to the Red Sea, lies at least 1,000 kilometres (650 miles) from South Sudan's oil fields, and crosses remote swamplands rife with rebel forces, as well as the entire territory of Ethiopia.

"Another route will go from (oil producing) Upper Nile state to the port of Mombasa in Kenya, or to Kenya via Kampala," Dau added.

Thousands of trucks would be potentially needed for the scheme to work, but it would still only export a fraction of South Sudan's 350,000 barrel a day production at full capacity, with the journey to the Kenyan coast taking at least a week.

In addition, impoverished South Sudan has only some 100 kilometres (60 miles) of tarred road in a country about the size of France, and Dau admitted a massive road network would be needed to be built first for the plan to work.

But the ministry is also considering the use of river barges to transport its crude or a pipeline under the Nile to the capital Juba.

The river is "the shortest distance... We will use Nile barges or we will drill a temporary pipeline through the Nile to Juba, where we will build a new port," Dau added.

Dau shrugged off criticism that the schemes were unworkable, and stressed that these were only ideas being mooted, and that no financing had been confirmed.

"These are just ideas. We are still talking and negotiating with companies ... we have not chosen a company yet," he said.

South Sudan has also signed an agreement to build an oil pipeline to Djibouti and another to the Kenyan coast, where a huge new port and terminal at Lamu was launched last week.

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