Kenya and landlocked South Sudan have signed a $1.5-billion deal for the construction of a new 1,260-kilometer oil pipeline linking Juba and the Indian Ocean port town of Lamu, where the former country has launched a multibillion port expansion plan that includes an oil refinery with a capacity 120,000 barrels per day, or bpd.
The pipeline will enable South Sudan to transport its estimated 260,000 bpd of crude oil to the international market. After splitting with its northern neighbor, Sudan, after decades of a bloody civil war, South Sudan lost control of the only pipeline to the Red Sea and its oil export terminal.
“The pipeline will be developed through Kenya territory and will be owned by South Sudan. The two countries will negotiate and agree on a transit fee for the oil pipeline,” said Kenya’s Prime Minister Raila Odinga in January.
Both South Sudan and Sudan account for 5% of China’s oil imports, which totaled 13 billion barrels last year. South Sudan hopes to achieve financial stability and not rely on its northern neighbor to access the international market.
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