News
East Africa’s ambitious plan to boost its oil supply infrastructure
enters a critical phase this week as Kenya and Uganda float a design
tender, while South Sudan decides whether to build a pipeline through
Kenya or Djibouti. TEA Graphic
By JOINT REPORT The EastAfrican
In Summary
- Sources said President Uhuru Kenyatta and his Ugandan counterpart Yoweri Museveni are keen to see the project take off ‘‘in a matter of months.”
- The EastAfrican has learnt that a $3 million feasibility study commissioned by South Sudan, on both routes — to Lamu and Djibouti ports — has found both technically viable, but the government is due to consider the cost, terrain of each route and geopolitics of the region.
- The decision has presented a headache for Juba for while a pipeline to Djibouti makes a stronger economic case, its deep diplomatic connections with Uganda and Kenya make it hard for it to ignore these two states.
East Africa’s ambitious plan to boost its oil
supply infrastructure enters a critical phase this week as Kenya and
Uganda float a design tender, while South Sudan decides whether to build
a pipeline through Kenya or Djibouti.
On Monday, the presidents of Kenya, Uganda and
Rwanda — meeting under the auspices of the 3rd Infrastructure Summit in
Kigali — are expected to receive a progress report on the planned crude
oil pipeline under the Lamu Port South Sudan Ethiopia Transport
(Lapsset) corridor project.
Sources said President Uhuru Kenyatta and his
Ugandan counterpart Yoweri Museveni are keen to see the project take off
‘‘in a matter of months.” It has emerged that after the Kigali meeting,
Kenya and Uganda are to jointly float a tender for the design of the
pipeline.
“For Kenya and Uganda, the proposed pipeline is
becoming an immediate necessity. Government officials have been given
strict timelines. The two countries are under pressure to get
quotations,” said a Kenya oil executive familiar with the matter.
“Uganda is desperate to get a route for its oil
just as Kenya is. For South Sudan, it has already dealt with its most
pressing problem by using the old Khartoum route to export its crude.
What it is looking for now is a security option that would give it a
bargaining alternative.”
The pipeline is expected to run 1,500 kilometres
from Hoima near Lake Albert in western Uganda to Lamu port on Kenya’s
Coast. The project is expected to be commissioned by 2017, when the two
states are projected to officially join the league of oil producing
countries.
Lapsset
However, it is unclear whether South Sudan will be part of the pipeline at the initial stage.
On August 28, in their second summit in Mombasa,
the three presidents had directed government officials to ensure that
the South Sudan-Lokichar-Hoima crude oil pipeline is integrated into the
Lapsset corridor project by December 31. At the Mombasa meeting, South
Sudan’s Minister for Foreign Affairs and International Co-operation
Barnaba Marial Benjamin represented President Salva Kiir.
The EastAfrican has learnt that a $3
million feasibility study commissioned by South Sudan, on both routes —
to Lamu and Djibouti ports — done by the German-based engineering firm
ILF and the UK-based legal firm IDP, has found both technically viable,
but the government is due to consider the cost, terrain of each route
and geopolitics of the region.
“By the end of October, the result will be
presented to the leadership for a decision,” said Gatwech K Thich,
director of pipeline unit at the Ministry of Petroleum and Mining. “The
leadership will make a decision on which route they want to take based
on cost, the distance, and all other factors that influence the
construction and the operation of a pipeline,” he said.
The decision has presented a headache for Juba for
while a pipeline to Djibouti makes a stronger economic case, its deep
diplomatic connections with Uganda and Kenya — both of which helped it
in the fight for Independence as well as in the negotiations with Sudan —
make it hard for it to ignore these two states. Further, the country is
eying admission into the East African Community and a choice of
Djibouti would not further this cause.
READ: East Africa’s future: The pull of the north
“The government is in a dilemma. It needs a short and less costly route on one hand, but on the other hand there are friends it does not want to leave abruptly,” said a senior government source who asked not to be named.
“The government is in a dilemma. It needs a short and less costly route on one hand, but on the other hand there are friends it does not want to leave abruptly,” said a senior government source who asked not to be named.
Kenya will be keenly watching the developments in
South Sudan given the impact any decision would have on plans to develop
a corridor connecting Kenya to that country.
The decision adopted by Juba could either
complicate or make the case for Kenya’s planned $22 billion Lapsset
project, as part of its economic feasibility was pegged on the existence
of a pipeline from Lamu to South Sudan. The decisions, analysts and
government officials said, could have a far-reaching impact on the shape
the region’s energy infrastructure will take.
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