Uganda weighs in on South Sudan – Kenya oil pipeline - Pipelines International

In October, Ugandan Prime Minister Amama Mbabazi said it would be cheaper for South Sudan to construct the proposed oil pipeline to the Kenyan coast through Uganda, under a joint venture with the Ugandan Government, which would co-fund the project.

The pipeline, estimated to cost $US3 billion, will transport up to 1 MMbbl/d of South Sudan’s crude oil to other countries via the Kenyan port of Lamu. Prime Minister Mbabazi said that the pipeline would benefit the region because more countries would contribute and use it.

Prime Minister Mbabazi hailed the recent understanding between Sudan and South Sudan on how crude oil would be exploited for their mutual benefit. However, he warned that there should be agreement among the countries along the River Nile on how the Nile waters should be shared.

Background

In August 2012, South Sudan’s Minister for Petroleum and Mining Stephen Dhieu signed an agreement with Kenya’s Energy Minister Kiraitu Murungi at Nyayo House in Nairobi for the construction of the crude oil pipeline, which is expected to commence construction in June 2013.

A Memorandum of Understanding (MoU) signed by the two countries in late January 2012 established a Joint Co-ordination Commission (JCC) to fast-track the development. The JCC is co-chaired by the Under-Secretary for Petroleum and Mining of the Republic of South Sudan and the Permanent Secretary for Energy of the Republic of Kenya.

The two governments are in the process of negotiating an Inter-Governmental Agreement that will provide the legal framework for the pipeline. The Inter-Governmental Agreement will provide support for the project and co-operation for non-interruption of the project; and, security and access during construction, installation and operation of pipeline.

The two governments have also agreed to prioritise the project implementation and co-operate in capacity building, sharing of information and experiences on best practices, joint human capacity enhancement and development including provision of requisite support for the benefit of the project and the two countries.