JUBA, (Reuters) – South Sudan on Wednesday said it was considering building a link to an oil pipeline in Kenya, a move that would allow its oil to bypass old civil war foe north Sudan after it secedes.
The south will control 75 percent of the African country’s 500,000 barrels a day of oil production when it becomes an independent state on Saturday.
Under current arrangements, the underdeveloped south has to rely on the north’s pipelines and Red sea port to sell the oil.
The announcement will cause concern in Khartoum, which was counting on the payment of fees to transport southern oil through northern pipelines to at least cushion the blow of losing the southern oil revenues.
Analysts said any pipeline construction would be years away, though the announcement sounded a bit more concrete than previous plans.
Anthony Makana, southern minister of roads and transport, said the south was in talks with several oil firms to build a 200 kilometre long link to the existing pipeline running from Mombasa to Eldoret in Kenya.
“To build a pipeline is a very easy thing for us,” he told reporters in the southern capital Juba, putting the cost at a “few million dollars”.
He said such a pipeline would help the south export its oil to African neighbours such as Kenya, Uganda, Congo, Rwanda, Burundi, Tanzania and Ethiopia.
Makana also said some oil fields contained more gas than oil, making it “economically viable to extract gas and then oil from some fields”. He gave no further details, including how long such a project might take.
The southern government said in the past it was interested in finding new routes for its oil but so far has failed to give concrete details.
Dana Wilkins at campaign group Global Witness said any talks with oil firms were probably still in the early stages and that it would take a minimum of two to three years to complete any project.
“I think it’s in the early days. Otherwise they would be more public,” she said.
“A lot of time they will have to cooperate with the north,” she said, adding that transparency of awarding contracts would be important.
Kenya has already asked investors to fund its $22 billion share of a planned corridor that would connect Ethiopia and South Sudan to the Kenyan coast with railways, roads, telecommunications cables and a 1,400 km pipeline.