S. Sudan to build underwater pipe for oil exports

PanARMENIAN.Net - South Sudan, locked in a row over oil transit fees with neighbour Sudan, said on Wednesday, March 7 it plans to build a temporary underwater oil pipeline along the Nile as part of a project to deliver crude for export from ports in Kenya and Djibouti, Reuters reported.

Oil provides about 98 percent of South Sudan's income and is vital to the impoverished country as it tries to develop infrastructure and institutions devastated by a war that killed an estimated 2 million people.

South Sudan seceded last July under a 2005 peace agreement that ended decades of civil war with Khartoum. But peace remains uneasy at best, with the north and south deadlocked over oil transit fees that have contributed to recent high global oil prices.

Some 30,000 barrels per day (bpd) of crude would be delivered to ports under the project, which could be completed by the end of the year.

The landlocked new nation took control of about three quarters of the unified country's oil output of roughly 500,000 bpd, but it needs to export its crude through northern pipelines to the Red Sea port of Port Sudan.

The two nations separated without agreeing how much the south should pay to use oil facilities in the north.

South Sudan has signed agreements to build new pipelines through Kenya and Ethiopia that they hope to complete within 18 months, although analysts doubt the economic viability of the schemes.

South Sudan's government in Juba shut down its 350,000 bpd oil production in January after the north seized more than $800 million of the south's oil and built a tie-in pipeline to divert it through refineries in Khartoum.

The two countries last month signed a pact agreeing to "respect each other's sovereignty and territorial integrity, non-interference in internal affairs, rejection of the use of force, equality and mutual benefit; and peaceful coexistence." Then last week South Sudan accused Sudan of bombing an oil well. Sudan denied responsibility. The two governments met in Ethiopia on Tuesday to try to break the deadlock over oil transit fees.