April 13, 2012 / 4:03 PM / 8 years ago

S.Sudan: Japan firm completes Kenya pipeline study

NAIROBI (Reuters) - South Sudan said Toyota Tsusho would soon make a financial proposal on the construction of a pipeline to transport the country’s oil to a port in Kenya for export, after the Japanese firm completed a feasibility study.

In January, South Sudan signed an agreement with neighbouring Kenya, the region’s largest economy, to build the pipeline to connect its oil fields with the Kenyan port of Lamu, which is under construction.

Landlocked South Sudan seceded from Sudan last year, but the two countries are fighting over a vital oilfield on their border after tensions rose following a dispute over how much the Juba government should pay to transport its oil output through Sudan to Djibouti’s Red Sea port.

Speaking in Nairobi, Pagan Amum, South Sudan’s lead negotiator in talks to resolve the dispute with Sudan, said Toyota Tsusho was expected to begin putting together a financial package for the pipeline, the cost of which has yet to be made public.

“Toyota Tsusho of Japan has completed feasibility studies for the building of the pipeline to Lamu and are putting together a financial proposal to begin construction of the pipeline,” Amum told a news conference.

South Sudan is also considering building another pipeline through Ethiopia and Djibouti as well as using trucks to move crude to the port of Mombasa.

South Sudan shut its roughly 350,000 barrel-per-day oil output in January in a row over how much it should pay to export crude via pipelines and facilities in Sudan.

Oil accounted for about 98 percent of the new nation’s state revenues, and officials have been scrambling for ways to make up for the loss.

China is the biggest buyer of oil from Sudan and South Sudan, purchasing some 12.99 million barrels last year. That amounted to 5 percent of last year’s crude imports by China, which is also the top investor in South Sudan’s oilfields.

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