South Sudan pipeline a step closer

South Sudan oil export pipeline to cost $3bn27 June 2013, News Wires – South Sudan moved a step closer this week to ending its reliance on neighbour Sudan for oil exports after a regional pipeline deal was agreed.

The governments of East African states Kenya, Rwanda and Uganda penned an agreement to build two pipelines in the region, according to the BBC.

One of the pipelines would run from South Sudan to the Kenyan port of Lamu with another running from Rwanda to Mombasa, also in Kenya.

The pipelines have long been in the offing and will continue to prove contentious: when South Sudan gained independence from Sudan two years ago it took with it about three quarters of the oil reserves of the combined countries.

Currently South Sudan relies entirely on Sudan to export its crude, using its neigbhour’s pipelines and Port Sudan.

However, production shut-ins are frequent as the two regularly argue over oil revenue sharing and security issues along their border.

With a pipeline linking South Sudan’s oilfields to the Indian Ocean, Sudan would be deprived of a large revenue base.

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