South Sudan to unveil pipeline plans next week: minister

Posted: January 21, 2012 by PaanLuel Wël Media Ltd. in Economy
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JUBA/BEIJING (Reuters) – South Sudan will announce plans for an oil export pipeline through East Africa next week, a priority for the new nation because its crude is “no longer safe” in Sudan, a government spokesman said on Saturday.

Landlocked South Sudan took about three quarters of Sudan’s roughly 500,000 barrels per day of oil production when it seceded from Sudan in July under a 2005 peace deal, but it still relies on Sudan’s infrastructure to export crude.

Oil is vital to both economies — it accounts for almost all of South Sudan’s government revenues — but the two countries have yet to agree how much South Sudan should pay as a transit fee.

South Sudan threatened to halt crude output within two weeks on Friday, after its northern neighbor started seizing crude to compensate for what Khartoum calls unpaid fees.

“The pipeline is now a priority. The minister of petroleum and mining will announce next week which pipeline we are going with and the consortium that will be involved,” Barnaba Marial Benjamin, South Sudan’s information minister and government spokesman, told Reuters by telephone.

“It has to be done because of the shutdown. Our crude is no longer safe in Sudan,” he said. “If we choose the pipeline through Kenya it could take less than 10 months to complete.”

South Sudan has floated the idea of an East African pipeline before, but outside experts say barriers include geography and the need to ensure enough production volume to fill the pipeline in the future.

South Sudanese officials have previously said the country can survive on credit using crude as collateral if exports were ever halted.

“CALM AND RESTRAINT”

The new pipeline will be built with the help of international oil companies operating in its fields, China’s state-run Xinhua news agency reported earlier on Saturday.

China, a major buyer of South Sudanese crude, has urged “calm and restraint” over the dispute, which began in November.

The two neighbors together rank as the seventh-largest supplier of crude oil to China, accounting for 5 percent of its imports in 2011.

South Sudan has started “practical steps” to construct a pipeline through Kenya and Uganda and would begin construction of a refinery in South Sudan immediately, Xinhua quoted Benjamin as saying.

International oil firms currently operating in South Sudan would construct the pipeline and refinery, the agency cited Benjamin as saying. It did not specify which.

Oil firms active in South Sudan include Chinese state-owned China National Oil Corp., or CNPC, and Sinopec, Malaysia’s state-owned Petronas, and Oil and Natural Gas Corp of India, or ONGC.

French oil major Total said in December it could build a pipeline from South Sudan to Uganda that would continue to Kenya’s coast but that construction of the pipeline at the time was still “just thoughts.”

South Sudanese officials have also talked to Toyota Kenya about the possibility of linking to a proposed regional oil corridor to help export crude.

(Additional writing by Alexander Dziadosz; Editing by Alison Birrane)

http://www.chicagotribune.com/news/sns-rt-us-south-sudan-pipelinetre80k0l0-20120121,0,7464215.story

South Sudan to build crude pipe thru E Africa-Xinhua

Sat Jan 21, 2012 9:47am GMT

BEIJING Jan 21 (Reuters) – South Sudan is planning to construct an oil refinery and a crude oil export pipeline through East Africa with the help of international oil companies operating in its fields, China’s state-run Xinhua news agency reported on Saturday.

The landlocked new nation earlier threatened to cut off crude output within two weeks, after it said its northern neighbour had begun seizing crude to compensate for what Khartoum called unpaid transit fees.

“We had to look for alternative route for exporting the oil after we have reached a deadlock with Sudan, which is exaggerating in the oil transit fees,” Barnaba Benjamin, South Sudan’s information minister and government spokesman, told Xinhua.

“We have started practical steps to rapidly construct a pipeline through eastern Africa, namely via Kenya and Uganda. We expect the pipeline to be completed in 10 months. We will also begin immediately the construction of a refinery in South Sudan.”

The Chinese foreign ministry had earlier on Saturday urged “calm and restraint” over the dispute, which began in November. The two neighbours together rank as the seventh-largest supplier of crude oil to China, accounting for 5 percent of its imports in 2011.

South Sudan has floated the idea of an East African pipeline before, but outside experts say barriers include the geography to be traversed as well as the need to ensure enough production volume to fill the pipeline in future.

International oil firms currently operating in South Sudan would construct the pipeline and refinery, Xinhua cited Benjamin as saying. It did not specify which.

Oil firms active in South Sudan include Chinese state-owned China National Oil Corp., or CNPC, and Sinopec, Malaysia’s state-owned Petronas, and Oil and Natural Gas Corp of India, or ONGC. (Reporting By Lucy Hornby; Editing by Alison Birrane)

http://af.reuters.com/article/kenyaNews/idAFL3E8CL06G20120121

South Sudan to build new pipeline

(Xinhua) KHARTOUM – South Sudan announced Saturday that it has started to take steps to build a new pipeline through eastern Africa to export its oil, adding that the project is expected to be completed within 10 months.

“We had to look for alternative route for exporting the oil after we have reached a deadlock with Sudan, which is exaggerating in the oil transit fees,” Barnaba Benjamin, South Sudan’s information minister and government spokesman, told Xinhua.

“We have started practical steps to rapidly construct a pipeline through eastern Africa, namely via Kenya and Uganda. We expect the pipeline to be completed in 10 months. We will also begin immediately the construction of a refinery in South Sudan,” he added.

Benjamin further disclosed that the international oil companies operating and producing oil in South Sudan are the ones that would construct the pipeline and the refinery, noting that “we do not have any problem with the companies currently operating in the south.”

South Sudan government on Friday decided to stop the production of oil due to differences with Sudan over the exportation of South Sudan’s oil through the Sudanese harbors.
Sudan and South Sudan are negotiating in the Ethiopian capital of Addis Ababa, under the mediation of the African Union, to reach an agreement over the oil issue.

South Sudan government says Sudan has embarked on shipping amounts of South Sudan’s oil and selling them for its own benefits, while Sudan says it is deducting the transit fees in form of material oil.

http://www.chinadaily.com.cn/world/2012-01/21/content_14488940.htm

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