South Sudan retained three-quarters of total Sudanese-South Sudanese oil production when it gained independence from its northern neighbor in July 2011; but the South has little oil infrastructure of its own and can only export its oil through pipelines owned by the North. The two countries failed to reach an understanding on oil transit fees prior to the independence of South Sudan.
Pipelines
The Unity and Heglig oil fields in South Sudan, which produce the bulk of the country’s Nile Blend crude oil, are connected to a terminal at Port Sudan, on Sudan’s Red Sea coast, through a 1,540-km pipeline operated by the Greater Nile Petroleum Operating Company (GNPOC).
Petrodar owns and operates a separate pipeline beginning at its oil blocks in the Melut Basin of Upper Nile state, in northern South Sudan, and stretching some 1,500 kilometers also to Port Sudan. The pipeline has a carrying capacity of 500,000 barrels per day (bpd); the system also includes production facilities and a 300,000 bpd processing facility.
Potential pipelines
South Sudan has signed non-binding memoranda of understanding with both the Kenyan and Ethiopian governments on a proposal to build two pipelines through both countries. If constructed, the pipeline through Kenya would go to the port of Lamu and the pipeline through Ethiopia would end at the port of Djibouti. South Sudan wants the planned pipeline from South Sudan to Kenya’s Port of Lamu to be just over 1,000-miles long, with a capacity of 500,000 bbl/d, and completed within 18 months. However, most analysts remain skeptical and believe that, if constructed, the pipeline would take at least 2-3 years to complete, given the general logistics, lack of roads, and security concerns surrounding the pipeline route.
In April 2012, Japanese firm Toyota Tsusho completed a feasibility study of the South Sudan-Kenya pipeline.
In December 2011, French oil major Total said it could build a pipeline from South Sudan to Uganda that would continue to Kenya’s coast, potentially solving the fledgling state’s oil export problems.
Refineries
There are no refineries in South Sudan; however, the pipeline project that South Sudan expects to undertake with Kenya includes plans for building a refinery in Lamu. There are potential plans to build domestic refineries to export petroleum products to regional markets, such as Kenya, Uganda, and Ethiopia.
South Sudan’s new pipeline plans
To reduce its dependency on Sudan’s infrastructure, South Sudan in January signed memorandum of understanding (MOU) with the Kenyan government to build an oil pipeline from South Sudan to the Kenyan port of Lamu; a month later Juba signed another MOU with Ethiopia’s government to build an oil pipeline via Djibouti.