LAPSSET tracking

Geza Ulole

Geza Ulole

JF-Expert Member
Oct 31, 2009
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These two reports have implications on the ambitious LAPSSET project as Ethiopia and South Sudan are envisaged members of this project. Can someone explain to us how is the project now? With these two vital members inclined towards Djibouti?

South Sudan 'leaning towards Djibouti oil pipeline'

By MOHAMMED AMIN | Friday, August 23 2013 at 10:33

South Sudan is increasingly looking at Djibouti as the more feasible option of exporting its oil, a senior official said.

The undersecretary in South Sudan's finance minister Wani Gweri told this writer in an interview that government surveys showed that transporting oil through Djibouti was more cost-effective than doing so through Kenya.

"Currently the shortest and cheapest route for this pipeline is through Djibouti, because our fields are nearer to Ethiopia and Djibouti than to Kenya or Sudan, but it depends on the locations of our fields in South Sudan," he said.

"The United States, China, Germany and Japan are seeking approval to construct the new oil pipeline to carry South Sudan's oil to the international market through Kenya or Djibouti," Mr Wani added.

pipe_.jpg


South Sudan is exploring constructing an oil pipeline either through to Djibouti or via Kenya. IMAGE | BBC

Some reports said that such a pipeline would cost more than $3 billion and would need more than three years to be accomplished.

South Sudan is landlocked country, but has an estimated three billion barrels of oil reserves. The country currently produces 300,000 barrels per day. The official said that Juba was now evaluating bids for the alternative pipeline.

"We deal with this matter in a transparent way, so we will declare the details at the end of the competition which is organised by our ministry of oil and energy, but right now we can't make it public," Mr Wani said.

"The final determination will depend on the result of [the bid] and the locations of the fields, so we need to discuss several alternatives," he said.

South Sudan has since independence in July 2011 exported its oil through former civil war Sudan. But a dispute over oil transit fees among other unresolved issues resulted into an escalation of tension between the two states, leading to the total shutdown of oil production in 2012.

Agreed to pay

South Sudan has agreed to pay Sudan $23 per barrel for use of its pipeline, refineries and ports.
Khartoum has however repeatedly threatened to close the flow of southern oil through its territories, claiming that South Sudan is supporting insurgents against it.

Juba denies providing any support to Sudanese rebels.

British-based campaign group Global Witness has urged South Sudan follow more transparent procedures regarding oil revenues, asking Juba to enact the legislation of oil management which has been passed by parliament.

"[The] risk of corruption and mismanagement in the oil sector remains high with rumours that new oil contracts may have been awarded over recent months,
apparently without the open, competitive, and transparent bidding processes included in the 2012 oil legislation," the organisation said in a press release.

"South Sudan has attempted to sell several unexplored oil blocks for $1 billion," the organisation added.

China is the biggest investor in oil field in both Sudan and South Sudan, but many European oil companies like French Total and British White Nile companies had signed some exploring contracts in some areas in South Sudan with former SPLM rebels during the civil war between the two countries.

South Sudan

South Sudan 'leaning towards Djibouti oil pipeline': Business and Finance-africareview.com


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Construction At Nagad Railway Station in Djibouti Officially Launched

In a groundbreaking ceremony held Sunday (July 7) in Djibouti, Prime Minister Hailemariam Desalegn and President Ismail Omar Guelleh launched construction of the new Nagad Railway Station.

Construction of the station, which will form part of the 800km Addis Ababa - Dewele - Djibouti route, was also inaugurated in the presence of Ethiopia's Minister of Foreign Affairs, Dr. Tedros Adhanom.
Following the groundbreaking, Prime Minister Hailemariam stated that the railway will have a significant impact on the region, namely in bolstering regional economic integration.

Similarly, President Guelleh said "the infrastructure will advance economic cooperation and social connections between the two sisterly countries". Both leaders described the occasion as a historic day for the region.

On his part, Dr. Tedros explained that the $4.5 billion USD railway project exemplifies Ethiopia's foreign policy which aims to fight poverty and build a prosperous nation and region. He went on to explain via his twitter account that the costs of the massive rail project would be shared by both governments and that, on the Ethiopian side, 20% of the construction had already been completed.

He expressed his happiness that everything was ready on the Djiboutian side, including all necessary equipment, in order to begin construction of the Nagad Station. He concluded by emphasizing that July 7 was a great and historic day for both countries.

allAfrica.com: Djibouti: Construction At Nagad Railway Station in Djibouti Officially Launched
 
Each of these projects is an alternative to the other. At the onset of LAPSSET, Djibouti was always going to be the other alternative. Even if the port of Djibouti will eventually be the preferred route, the LAPSSET will still have other roles to play such as opening up Southern Ethiopia and parts of South Sudan. It still is a win-win situation.
 
Kenya to lose out as Juba plans for Djibouti pipeline

pipeline.jpg


South Sudan President Salva Kiir (left) and former Kenyan president, Mwai Kibaki, (centre) and Ethiopian PM, the late Meles Zenawi, during Lapsset's launch in Lamu. FILE

Kenya could lose out on major economic benefits linked to handling South Sudan's oil exports if a plan by the government to re-route its pipeline through Djibouti comes to pass.

In an interview with Africa Review, a publication of the Nation Media Group, the under-secretary for South Sudan's finance ministry Wani Gweri said the government is increasingly looking at Djibouti as the more feasible option of exporting its oil as it is more cost-effective than using the Lamu port.

A decision by South Sudan to route its oil through Djibouti would leave Uganda and Kenya as the only financiers and users of the proposed Lamu pipeline.

Kenya would stand to gain through sharing of the cost of building and maintenance of the pipeline, which would also be used to transport oil exports from the Turkana oil fields.

Handling shipments of the oil would also bring in extra income at the Lamu port, with the possibility of the building of a refinery to serve the three States.

Mr Gweri told Africa Review that the shortest and cheapest route for the South Sudan pipeline is through Djibouti since the oil fields are nearer Ethiopia and Djibouti than Kenya and Sudan.

The country is now evaluating bids for the pipeline.

"We will deal with this matter in a transparent way. The final determination will depend on the result of the bid and the locations of the fields, so we need to discuss several alternatives," he said.

South Sudan has been considering alternatives to the old pipeline that runs through its northern neighbour, Sudan, following persistent disputes on shipment fees.

South Sudan has over three billion barrels of oil reserves, pumping over 300,000 barrels per day.

The comments cast a shadow on an agreement signed in January between Kenya and South Sudan for the construction of an oil pipeline from the South Sudanese oil fields to Lamu.

Since the deal was signed, however, Kenya has discovered commercially viable deposits in the Turkana basin.

George Wachira, a director at Petroleum Focus Consultants, says that South Sudan should take economic benefits that would come from sharing construction costs.
Uganda and Kenya have signed a deal to jointly construct a pipeline to Lamu to ship crude oil.

The route would pass through Turkana, the same route that the Lamu Port Southern Sudan-Ethiopia Transport Corridor (Lapsset) was meant to pass.

"If South Sudan joins up with Uganda and Kenya they will enjoy economies of scale and save on investments costs by forming a tripartite joint venture for a pipeline to Lamu. Perhaps the South Sudan tender quotations will reflect this new Lamu scenario which will enable the country to make the correct investment decision," said Mr Wachira.

South Sudan is party to the Lapsset project, which incorporates an oil pipeline running from Lamu to South Sudan.

The country's President Salva Kiir joined former President Mwai Kibaki and the late Ethiopian Prime Minister Meles Zenawi in laying the foundation stone for the project on March 2, a move that was then interpreted as indicating Sudanese preference for the Lamu port.

The bids for the new pipeline come at a time when South Sudan has moved towards enacting laws on its oil industry, seen as key in attracting much needed investment in the sector.

The country's Parliament this week passed the petroleum revenue management Bill, which sets out regulations and rules on spending of oil revenues.

cmwaniki@ke.nationmedia.com

Kenya to lose out as Juba plans for Djibouti pipeline - Money Markets - businessdailyafrica.com
 
You have to look at the cost of transporting oil between Ethiopia and Djibouti in comparison to Kenya. if it passes through djibouti, the big powers like Japan, China, Germany, Russia and USA and their corporations will benefit more from the oil than the South Sudanese.

Competition is stiff within EA, already vision 2030 is showing indications that it is not a white elephants berth number 19 in kilindini is complete and Lamu port is on course dwarfing other projetcs in the region like Chinese Bagamoyo project.
 

Lamu-port.jpg

The port of Lamu: A mega-port project on the north Kenyan coast conceived in the 1970s may finally be gaining traction based on commercial oil finds in Uganda and Kenya, but it needs more financing to compete with a Chinese-backed port in Tanzania and other rivals.

A mega-port project on the north Kenyan coast conceived in the 1970s may finally be gaining traction based on commercial oil finds in Uganda and Kenya, but it needs more financing to compete with a Chinese-backed port in Tanzania and other rivals.

Initial work has started on a mangrove coast near the ancient Arab trading post of Lamu that could in a few years be a bustling container port and crude terminal, creating an export hub for fast-growing east African states and their oil.

But Kenya must shore up regional commitment for the $25.5 billion Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) plan that by 2030 envisages a port, new roads, a railway and pipeline.

It must also overcome environmental worries and make a clearer economic case to avoid creating one more African white elephant.
The prize will be to bolster Kenya's primacy as east Africa's trade gateway and capitalize on a bonanza from one of the world's hottest undeveloped oil provinces, where exports from Uganda and Kenya alone could reach 500,000 barrels per day.

Experts say the Lamu port and transport links are viable, if not on such a huge scale. Some South African banks are watching closely. But emerging markets now face tougher times raising cash and no big donors, such as China, have thrown their full weight behind the plan. Other pitfalls also lurk.

"The big obstacle is really a political one and making sure all the discussions that need to happen, happen," said Clare Allenson, analyst at the Eurasia Group consultancy, referring to a region where rivalries can run deep even within the east African trade bloc.

"This is a very grandiose scheme and there are ample examples of this type of thing never coming off the ground (in Africa)," she said.
Initially predicated on convincing South Sudan to switch its oil exports to Lamu from the regularly disrupted pipeline it now uses via Sudan, the Kenyan scheme has found a new raison d'etre.

First, Uganda agreed to ship its future oil output through a pipeline to Lamu. Then last month, British explorer Tullow Oil increased Kenya's oil reserve estimates and said east Africa's biggest economy could start oil exports by 2016.

"We are now talking about three oil sources, up from one oil source when the studies were previously done," LAPSSET Chief Executive Silvester Kasuku told Reuters.

Economies of scale
Kenya's virtual monopoly on regional trade through its now-congested Mombasa port, however, has often rankled its neighbors.
South Sudan has suggested that a new pipeline, probably warranted only if it finds more oil to replace mature fields, could run through Ethiopia to a port in Djibouti. Uganda lately backed a Kenyan route, after mulling one via Tanzania.

But Kenya and Uganda may be enough to get the oil terminal going. Nairobi is confident it can make an economic case for a Uganda-Kenya pipeline costing an estimated $2.5 billion to $5 billion, made costlier because Uganda's waxy oil means it must be heated to enable flow. A spur could then go to South Sudan.

"We are talking about economies of scale here ... which gives greater investment credence to the project, raises the project's profitability and de-risks a lot of other factors which were associated with one single oil source," Kasuku said.

The desire swiftly to monetize oil in the ground may also be focusing minds in the region, where many are still in poverty.
"East Africa is getting its act together in terms of starting to realize that if they do things together, they can move faster," oil and gas consultant Mwendia Nyaga said.

A compacted dirt road cut through the mangroves is the first sign of work at the site, where a Chinese firm has a $470 million contract for Lamu port's first three berths.

Those are the first of 32 planned berths at a port estimated to cost $5.5 billion. Further funds will be needed for the planned roads and railway linking South Sudan and Ethiopia, a land-locked nation of 90 million people that is growing swiftly.

But financing is merely trickling in. Battling a big budget deficit, Kenya allocated only about $48 million to the project this fiscal year. China's involvement with Lamu pales against its backing for Tanzania's $10 billion Bagamoyo port plan.

The World Bank, African Development Bank and European Union are funding roads linking Kenya with South Sudan and Ethiopia. Though this could help the Lamu project, these donors and concessionary lenders are not directly funding LAPSSET.

On the international markets, funding has become trickier as the United States looks set to rein in its loose monetary policy, hiking interest rates for emerging market borrowers. Still, some South African banks and others are keeping an eye on the project.

ECONOMIC CASE
"Given the ultimate size of the project, there will be considerable space for all lenders with African debt capacity to play (a role) in the funding," said Mike Peo, head of infrastructure at Nedbank Capital, the investment banking arm of South Africa's fourth-largest bank, Nedbank.

South Africa's Rand Merchant Bank also said it was interested, while London-based emerging markets specialist Standard Chartered said it was watching progress.

The Development Bank of Southern Africa (DBSA) has said it was keen to be a lead arranger for funding. Kasuku said the bank could offer as much as $1.5 billion to LAPSSET.

Fast-expanding regional economies provide a case that could make both Lamu and its Tanzanian rival commercially attractive, as trade increases to meet more demanding populations.

Kenya, Uganda, Ethiopia and others in the region with annual per-capita incomes now in the hundreds of dollars are aiming for middle-income status around $1,430 in the next decade or so.

But Nairobi needs to make a more careful case to secure funding and may need to focus on the oil side of the plans.
"A lot of the elaborate elements of the project are not going to reach fruition," Africa Confidential editor Patrick Smith said. "On the core oil terminals, I think they'll struggle but I think they'll get the money for it."

Some say Kenya must make a clearer case for creating a new container port over expanding and upgrading Mombasa.

"I don't see how container shipment through Lamu port can be the business case for the port," said Steve Felder, east Africa managing director of Danish shipping and oil group A.P. Moller-Maersk.

On the ground, the government faces worries the new port and surrounding development will harm delicate coastal vegetation and marine life, and could overwhelm the popular tourist destination of Lamu, where donkeys are still the main form of transport amid traditional Swahili coastal architecture.

Residents fear a land grab by a wealthy elite as the project gets under way at the expense of locals, a perennial complaint in Kenya. Local officials insist they will not let this happen.

"We have learnt from the Mombasa port experience where everything goes to the central government," Governor Issa Timamy told Reuters at a Lamu meeting where residents complained about seizures. "We are not willing to repeat that mistake in Lamu."
 
NAIROIBI, KENYA: Construction of the Lamu port begins next month, President Uhuru Kenyatta has announced.

He said the new port – which is part of the Lamu Port Southern Sudan-Ethiopia Transport ( LAPSSET) Corridor project – will provide an opportunity for the exploitation of the country's maritime resources. The President spoke today at Kenyatta International Conference Centre when he opened Kenya's very first National Maritime Conference. The conference was convened to discuss and develop a national action plan on how Kenyans can benefit from the country's maritime resources. Saying special focus must be put on training so that the country's maritime skills match the infrastructure being developed to exploit maritime resources, President Kenyatta disclosed that a public university will soon start to offer training in maritime studies.
Read more at: Standard Digital News : : Business - President Uhuru: Construction of Lamu Port begins next month

[video=youtube_share;sqsond_lolQ]http://youtu.be/sqsond_lolQ[/video]

Natumai Mombasa hatutaanza kasheshe wakati huu, kazi ya kujenga bandari iende mbele.
 
If the SS will be educated on the economies of scale and viability of opting the Uganda route, I think will quicky revisit their choice to DJ.
 
For all 5 years only an airport n an office block! Mind u this project was launched during Kibaki era...
 
wow. people saw a topic started by geza talking about lapsset and within an hour 3,200 poeple have passed through the thread..

it shows just how much tanzanians pray for bad things to happen to kenya just so they can rise.. ndo maana kukitokea habari za alshabaab hao hujazaba kwa server za JF...
punguzeni unafiki watanzania
 
lapsset is happening one way or another, resort cities, railways, highways, power plants, berths... the whole shabang! its happening and when the day gets here, I hope you wont still be too bitter cause you will have a really hard time shaving it all down your throaths.
 
Kafrican said:
wow. people saw a topic started by geza talking about lapsset and within an hour 3,200 poeple have passed through the thread..

it shows just how much tanzanians pray for bad things to happen to kenya just so they can rise.. ndo maana kukitokea habari za alshabaab hao hujazaba kwa server za JF...
punguzeni unafiki watanzania
Click to expand...

He started the thread way back in 2013..
 
Geza Ulole said:
For all 5 years only an airport n an office block! Mind u this project was launched during Kibaki era...
Click to expand...

so what is your point really?is it not enough that there is will to do it...would you want it to go faster? do you want it to collapse? umm I don't get what you are driving at
 
that mken said:
so what is your point really?is it not enough that there is will to do it...would you want it to go faster? do you want it to collapse? umm I don't get what you are driving at
Click to expand...
Dont mind him he is a troll. He has been doing this for years.
 
that mken n elbarik, i started this thread way back 2013, at that time i argued this project is a white elephant n nothing will happen since no sensible financial institution will inject money ($27 bln) into LAPSSET, hell broke loose!

Many of u said Chinese will while other said Toyota Tsusho will n even Uganda pipeline was mention! Right now Ethiopia is even unceremoniously being dragged into this tembo mweupe project!
 
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