South Sudan, Kenya Sign Agreement on Oil Pipeline to Lamu
January 25, 2012, 5:00 AM EST
By Jared Ferrie
(Updates with comment from government spokesman starting in third
paragraph.)
Jan. 25 (Bloomberg) -- South Sudan and Kenya signed a memorandum of
understanding to build an oil pipeline to the Kenyan port of Lamu, said
Barnaba Marial Benjamin, a spokesman for South Sudan's government.
Construction of the pipeline will begin "as soon as sources of funding are
made available," which should take about a month, Benjamin said in a phone
interview today from the capital, Juba. The accord was signed yesterday.
Benjamin said the need for a new pipeline has taken on added urgency since
South Sudan started on Jan. 22 to shut down oil production because Khartoum
is confiscating its crude and demanding a transportation fee of $32 a
barrel. Juba has offered $1 a barrel. South Sudanese President Salva Kiir
said Jan. 23 that Sudan has "looted" $815 million worth of his country's
oil.
South Sudan took control of about three-quarters of Sudan's output of
490,000 barrels a day when it gained independence in July. The crude is
pumped mainly by China National Petroleum Corp., Malaysia's Petroliam
Nasional Bhd. and India's ONGC Videsh Ltd.
Benjamin said Kenya and South Sudan have been discussing plans for a new
pipeline over the past few years and have identified possible investors,
including Toyota East Africa.
Negotiations between the two countries in Addis Ababa, the Ethiopian
capital, have been extended until "some kind of agreement" is reached on how
much landlocked South Sudan will pay to transport its oil across Sudan to
the Red Sea, Benjamin said.
South Sudan says Sudan is seizing exports that pass through its territory to
an export terminal on the Red Sea. Sudan says it is diverting the crude to
cover unpaid bills.
--Editors: Paul Richardson, Karl Maier, Ben Holland
To contact the reporter on this story: Jared Ferrie in Juba at
jferrie1_at_bloomberg.net
To contact the editor responsible for this story: Antony Sguazzin at
asguazzin_at_bloomberg.net
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Received on Wed Jan 25 2012 - 09:51:23 EST
