South Sudan to build debut $2 bln oil refinery

By Opheera McDoom

KHARTOUM (Reuters) - South Sudan's semi-autonomous government has approved plans to build a debut, $2 billion oil refinery, the southern energy minister said on Sunday, a step toward boosting its oil infrastructure ahead of a referendum on secession.

Sudan, emerging from decades of north-south civil war, produces more than 500,000 barrels per day (bpd) of crude from fields mostly in the landlocked south. But the refineries and pipelines are in the north, giving Khartoum control of the precious commodity.

"The government of south Sudan is planning to make a refinery (in) Akon, Warap state (which) will serve all the seven states west of the Nile," Southern Energy Minister John Luk told Reuters in an interview.

"It will take about a maximum of 36 months (to build). It will cost around $2 billion," he said. It would take crude from the oil fields in Unity state.

Luk said an Italian company was working on the details and the tender to build the 50,000 barrels per day capacity refinery would be open to Sudanese and international companies "very soon."

Sudan's discovery of oil helped reignite the war, which has raged on and off since 1955, primarily over issues of ideology, religion and ethnicity, leaving 2 million people dead.

A 2005 peace deal granted a new southern government wide-reaching powers, shared out the oil wealth and gave the south a key vote on secession in 2011.

Oil revenues account for more than 90 percent of south Sudan's budget and about half of Khartoum's yearly income. Oil refineries in the south would mean less need for cooperation with the north if the south were to secede.