South Sudan to use trucks to export crude

(Reuters) - South Sudan, locked in a bitter row over oil transit fees with neighbour Sudan, plans to export by road at least 10 percent of its 350,000 barrels-a-day output until pipelines are ready, the Wall Street Journal reported on Wednesday.

Oil provides about 98 percent of South Sudan's income and is vital to the impoverished country as it tries to develop infrastructure and institutions devastated by a war that killed an estimated 2 million people.

The government will use trucks to carry a minimum of 35,000 barrels a day of its output to Kenya's coastal city of Mombasa and to the coast of Djibouti while pipelines in Kenya and Ethiopia are being built, the paper quoted the minister for petroleum and mining, Stephen Dhieu Dau, as saying.

However, the plan to export crude by land was not yet finalised, Dau said, and he gave no timeframe for its start.

South Sudan seceded last July under a 2005 peace agreement that ended decades of civil war with Khartoum. But peace remains uneasy at best, with north and south deadlocked over oil transit fees that have contributed to recent high global oil prices.

The landlocked new nation took control of about three quarters of the unified country's oil output of roughly 500,000 barrels a day, but it needs to export its crude through northern pipelines to the Red Sea port of Port Sudan.

By June, South Sudan will reach an agreement with companies looking to finance an alternative pipeline in Kenya, Dau said.

The country is in talks with companies in China, Japan, Europe, South Korea and the United Stated about financing a pipeline running through Kenya and another through Ethiopia to Djibouti, he added, without naming the companies involved.

The Kenya pipeline would carry the Nile blend of crude, while the Ethiopia pipeline would carry the Dar blend, he added.