7 February 2013

South Sudan Pipeline Construction to Begin This Year

Juba — Construction of a pipeline to carry South Sudan's crude oil from oil fields in the landlocked country to an export terminal will begin later this year, according to the Ministry of Petroleum and Mining.

This was announced during a briefing by the Petroleum and Mining Minister Stephen Dhieu Dau and senior executives from his ministry held for top officials of the ruling SPLM General Secretariat on Saturday to enlighten them about the status of the country's oil industry.

In September 2012, South Sudan signed an Inter-Governmental Agreement (IGA) with Ethiopia and Djibouti to create a mechanism for the construction of a pipeline through their countries. South Sudan also expects to sign a similar IGA with Kenya, which would allow the construction of a pipeline to the Kenyan port of Lamu.

Ministry officials explained that a Japanese firm has completed feasibility studies on the Lamu route. They added that the Japanese and American companies have expressed interest to jointly fund the project on a Build, Own, Operate and Transfer (BOOT) basis.

According to Dr. Gatwech Thich, the Ministry's Director for Pipelines, a German company, ILF, has been contracted to carry out a feasibility study on the South Sudan-Ethiopia-Djibouti route, which will begin this month. The study, said Dr. Thich, will take between six and nine months.

The ministry said it was currently looking into the two options as possible routes for the pipeline. "So far we have not yet chosen the route," the Minister said.

But regardless of the route the government of South Sudan eventually decides to be most appropriate, construction will "begin in October," the Director for Pipelines pointed out.

The Ministry's Under Secretary and other top Ministry executives, including the Director General for Petroleum Mohammed Lino, the Director for Refineries Awow Daniel Chuang and Nile Petroleum Managing Director Paul Adong all made presentations during the briefing at the SPLM headquarters.

The briefing was in line with the SPLM's obligations as a ruling party to follow up on the performance of its cadres in the executive and to ensure that they are executing party policies and delivering on promises made to the people.

South Sudan was forced to shut down its oil production in January last year after Sudan imposed exorbitant transit fees and tariffs and in protest of continued theft by Sudanese authorities of its oil.

A deal to restart production has yet to be executed but South Sudanese officials are also looking at other options to export its crude oil.

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