JUBA - The construction of an alternate oil pipeline to the Kenyan port of Lamu is set to begin in June 2013, according to officials at Finance and Energy Ministries in the Government of South Sudan.
The government recently tasked a Japanese company (Toyota) to conduct a feasibility study of the 2,000Km long oil pipeline. The company concluded and reported to the government that the project is feasible and work should begin.
According to the Finance Minister Kosti Manibe the overall construction cost will be around $3 billion dollars with Kenya contributing a fraction of the cost based the memorandum of understanding signed between the two countries months ago.
Kosti admitted that South Sudan didn't have enough money to pay for the overall pipeline costs but have sufficient crude reserves that can satisfy the financiers.
South Sudan reached a deal last week with the Sudan in oil transit fees for transportation of oil through Port Sudan. The deal reached involved a compensation of $3 billion dollar to the Khartoum and an average of $10 dollars per barrel in transit fees.
South Sudan is not entirely happy with the deal and claimed the government was acting under enormous pressure to accept anything from the negotiators in Ethiopia. The government also asked the international community to contribute money to close the gap left by the deal with Khartoum.
South Sudan has more than 6 billion worth of crude reserves which can last for an extra 50 years. The country has abundance of untapped resources, and the government expect more discovery of oil and mineral resources elsewhere.
The Upper Nile Times