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The Nairobian

Kenya, S Sudan oil pipeline commences next June

Business

By By Fredrick Obura | Aug 11, 2012

By Fredrick Obura

Kenya and South Sudan have signed an agreement for the construction of a 2,000km crude oil pipeline between the two countries beginning next June.

The pipeline estimated to cost $3 billion, is expected to be used in the transportation of between 700,000 to one million barrels of crude oil from South Sudan to other countries via the proposed Lamu Port.

The agreement was signed by Stephen Dhieu, Minister for petroleum and Minning, Republic of South Sudan and Energy Minister Kiraitu Muriungi at Nyayo House. Kenya, which recently discovered oil in parts of Rift Valley, is also expected to use the infrastructure in the transportation of its oil surplus to other countries.

“The agreement we have reached is important for beating the 2015 target when we expect the pipeline project to be complete,” said Dhieu. “This is a project we are both relying on for the transportation of our crude oil to the port of Lamu,” he said.

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But Kiraitu said Kenya will only export its oil after meeting the domestic demand. “We are only going to export what we don’t need, fast tracking the construction of the pipeline would come in handy when looking at exporting the extra oil that we expect as we continue to discover more wells,” he said. He said the country will establish a refinery in Isiolo and connect it to a pipeline that would supply the refined oil to the rest of the country.

“There is going to be a pipeline connecting Nakuru to Isiolo, Nakuru to Eldoret and Kisumu and another one connecting Isiolo to Nakuru, Nairobi and Mombasa to feed the local market,”said the minister.

The two ministers pledged to prioritise implementation of the project and to cooperate in capacity building and sharing of information and experiences on best practices.