New pipeline plan for South Sudan

The government of South Sudan is set to unveil plans for a new East African pipeline next week. The decision to build the new line comes after statements that South Sudanese oil is “no longer safe in Sudan.” This most recent dispute between Sudan and South Sudan rose out of disagreements over transit fees.

According to one source, Khartoum was demanding a pipeline fee of US$ 36 per barrel, a figure that analysts say is 10 times the international norm for such a fee. It perhaps comes as no surprise then, that South Sudan is looking for alternative routes by which to export its oil.

Barnaba Marial Benjamin, the South Sudanese information minister and government spokesperson has been quoted as saying that South Sudan has begun to make “practical steps” towards the construction of a pipeline through Kenya and Uganda. Benjamin also added that the construction of a refinery in South Sudan would begin immediately.

Though none have been mentioned specifically so far, there are a number of companies that could be involved in the construction of a new pipeline and refinery: China National Oil Corp., Sinopec, and Natural Gas Corp. of India are all currently active in South Sudan. Another company, Total, discussed the possibility of constructing such a pipeline in December of last year but mentioned that the idea remained nothing more than “just thoughts.”

Published on 23/01/2012

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