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Kenya-Sudan Oil Pipeline Still Possible

  • Michael Onyiego

Responding to comments made by the Sudanese oil minister opposing the construction of an oil pipeline from South Sudan into northeastern Kenya, members of the Southern People's Liberation Movement say the South has not lost interest in the project.

With economic integration of the East African Community underway, Kenya is working to cement its position as the hub of the growing region. At the heart of the country's ambition is a proposed port in the small island town of Lamu, just off Kenya's northern coast.

The dream of a second major port, however, took a potential blow Monday when Sudanese Oil Minister Lual Acuek Deng came out against a proposed oil pipeline to connect the facility with Sudan's southern capital, Juba. Speaking to Khartoum newspaper al-Akhbar, Deng called the project uneconomical and said that existing facilities in Port Sudan, more than 2,000 kilometers north of Juba, could better serve the South's needs.

The statement came as a surprise from Deng, a member of the Southern People's Liberation Movement, who was appointed Minister of Oil just weeks ago. A source within the SPLM said that Deng's comments did not represent the official position of the Government of South Sudan, but his opinion as Minister of Oil in the Government of National Unity.

SPLM member and former Head of Mission in Kenya for the Government of South Sudan, John Andruga Duku, concurred with the assessment, saying the South has not made any decisions regarding the pipeline.

"Dr. Lual Acuek is a member of the Southern People's Liberation Movement, but he is not speaking the behalf of the Government of South Sudan," said Duku. "We have not done, really, a feasibility study to say definitely that this is not good economically. He is a minister of the Government of National Unity. Although he is from SPLM, he has to toe the line of the national government."

The pipeline is an important component of the future port, which will include a refinery to tap into South Sudan's vast deposits of oil.

The region is widely expected to choose independence from the North through a referendum in January. Many economic analysts predict the new nation will orient itself south, toward the five members of the East African Community, rather than deepening its ties with Khartoum.

But even if the pipeline is not built, the proposed port still may be necessary. Kenya's main port, Mombasa, is operating nearly at capacity and could fall short of servicing the demand in coming years. According to Kenya's largest newspaper the Daily Nation, the port at Mombasa is capable of receiving 20 million tons of cargo per year, and received 19 million in 2009.

Analyst on the Kenyan economy Robert Shaw says the region's potential for economic growth make the Lamu project practical, with or without the pipeline.

"It is not just Southern Sudan and it is not just oil," said Shaw. "Lamu looks quite attractive for access even from Ethiopia and certainly for goods coming from Juba, even if they do not think that a pipeline is viable. Kenya is a very important hub to southern Sudan, and that relationship is likely to broaden and strengthen and it is to the benefit of both countries."

The port facility is one of the key pieces of Vision 2030, a plan for economic and infrastructure development laid out by the government to take advantage of East Africa's budding economic potential by the year 2030.

Kenya has secured commitment from the Chinese government to help fund the port, which it hopes to complete by 2016. Japanese giant Toyota Tsusho, the trading subsidiary of automaker Toyota, also has expressed interest in collaboration on the project.

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