South Sudan has just invited international companies to invest in refinery and pipeline

[Geza Ulole]

South Sudan: Keeping the Oil Flowing​

September 25, 2020

Read about South Sudan’s emerging oil sector and more in the Africa Energy Series Special Report: South Sudan 2020 – the leading investor resource for tracking South Sudan’s current and future movements within the sector. Download the extended report and other AES Special Reports here.

South Sudan exports its crude oil via pipeline from Hegleig and Paloch to Khartoum and then to Port Sudan. To keep the oil flowing, it has invited international companies to participate in investment opportunities in its refining and infrastructure sectors.

South Sudan’s economic lifeblood is intertwined with that of Sudan. Both nations are oil-dependent, but South Sudan maintains the bulk of the region’s 3.5 billion barrels of proven oil reserves, while Sudan owns the export pipelines, the refineries and sea access. One is useless without the other. Based on that interdependency, the two nations signed an agreement in 2012 under which South Sudan would compensate Sudan for the loss of oil production revenue and for the destruction of pipeline infrastructure caused by the civil war.

The compensation was agreed to amount to USD $3 billion, to be paid as a fee per barrel of oil produced, while the reconstruction of the oil infrastructure is expected to cost up to $1.5 billion according to the South Sudanese Petroleum Ministry. Initially designed to last for three and a half years, the Transition Financial Arrangement was extended in 2016 to reflect the collapse in oil price and global demand. In December 2019, the document was once again extended for a three-year period, set to end by March 2022. It establishes that South Sudan should pay $26 for each barrel transported through the Greater Nile Pipeline (GNP), operated by Petrolines for Crude Oil Ltd., and $24.1 for each barrel that passes through the Petrodar Pipeline, operated by the Bashayer Pipeline Company.

These fees include the actual crude oil transport costs and a $15 per barrel fee that corresponds to the $3 billion South Sudan must compensate Sudan for. After 2022, if no further extensions are needed, the cost per barrel should come down to $9.1 and $11 for the GNP and Petrodar pipelines respectively, reflecting the conclusion of that payment. The agreement also states that South Sudan must supply as much as 28,000 barrels of crude oil per day to the Khartoum refinery.

Another Path
Despite improved relations, dependency on Sudan’s oil infrastructure remains a risk and South Sudanese leaders wish to have alternatives. Hence, the country joined one of Africa’s biggest infrastructure developments; the Lamu Port-South Sudan-Ethiopia Transport Corridor project (LAPSSET), which is a multi-billion-dollar project spearheaded by Kenya to create a transport corridor for oil and other commodities.

The oil pipeline alone is expected to cost up to $4 billion. While the project seemed to have stalled over the last few years, in January 2020, LAPSSET received its biggest support yet, when the African Union announced it was adopting the project as its own, stating it would even be extended to form a continent-wide corridor connecting to Kribi Port in Cameroon. The African Development Bank, the United Nations Economic Commission for Africa and the African Union’s New Partnership for Africa’s Development are all involved in promoting its implementation.

It is, however, uncertain how long the project will take to materialize and no new target date has been given for its conclusion.
Currently, the COVID-19 outbreak has forced the suspension of the second stage of the land surveys in Kenya, meant to assess the compensations needed for the land used for the pipeline.

Engage with the country’s oil sector opportunities firsthand at South Sudan Oil & Power 2021 – the nation’s flagship energy conference that will dictate the future of investment and development in the country. Click here to register.

MY TAKE: If Total or CNOOC r to enter into any sort of agreement with South Sudan to invest, South Sudan is to join EACOP!

South Sudan: Keeping the Oil Flowing

 

[eliakeem]

Those 4 reasons pointed out by Uganda to opt EACOP still hold water. However, there is another reason, SS oil field to Hoima is the shortest distance of all.

 

[Geza Ulole]

Those 4 reasons pointed out by Uganda to opt EACOP still hold water. However, there is another reason, SS oil field to Hoima is the shortest distance of all.

And both Total and CNOOC have oil fields in South Sudan!

 

[eliakeem]

And both Total and CNOOC have oil fields in South Sudan!

So, is the distance from the SS oil field to Port Sudan the shortest?

 

[Peasant educator]

I think a refinery is the best option for african countries, as for Uganda the pipeline is baseless. Uganda had rather invested in a refinery instead of a pipeline that would also boost industrialisation in EAC. Selling crude oil would lead to Uganda buying refined oil....
African countries should put an end to the saying " africa produces what it doesn't consume and consumes what it doesn't produce"

 

[Geza Ulole]

Intra-African Gas Pipelines: Operational and Upcoming Projects​

By Charné Hundermark, Southern and East Africa Editor on February 16, 2021

The African continent holds an impressive natural gas resource base, providing a resource to fuel decarbonizing economies globally, as well as domestic industries. While some African nations, such as Equatorial Guinea, Algeria and Egypt, have successfully extended the natural gas value chain, most others are yet to fully realize the benefits of the resource.

Gas pipeline projects bridge the gap between gas rich countries and gas deficient countries, allowing the utilization of the resource continent-wide. Several cross-border pipeline projects have been proposed, adding to some already operational networks.

The West African Gas Pipeline (operational)
The West African Gas Pipeline Project (WAGP) is a natural gas pipeline linking Nigeria’s Escravos region of the Niger Delta with Benin, Togo and Ghana. Developed by the West African Gas Pipeline Company Limited – a consortium of Chevron, Nigerian National Petroleum Corporation, Royal Dutch Shell, Volta River Authority, Société Togolaise de Gaz, and Société Beninoise de Gaz – the 678 km pipeline has a capacity of 5 billion cubic meters (bcm) of gas per year. The WAGP connects the western region of Africa, providing a viable natural gas supply to all participating countries. With a possible extension to Côte d’Ivoire, the project demonstrates the success of regional cooperation in the utilization of natural gas.

The Republic of Mozambique Pipeline Company Project (operational)
The Republic of Mozambique Pipeline Company (ROMPCO) is the commercial operator of an 865 km high-pressure gas pipeline connecting the onshore gas fields in Pande and Temane in Mozambique with Sasol’s operations in South Africa. Operating since 2004, the pipeline has provided a direct connection between the two countries and has ensured the effective monetization of Mozambique’s previously stranded resources.

The African Renaissance Pipeline Project (planned)
The African Renaissance Pipeline Project (ARP), a proposed $6 billion natural gas pipeline that aims to link Mozambique’s gas-rich Rovuma basin to Springs in Gauteng, South Africa, will connect an abundant resource with an increasing number of customers in the wider region. Extending 2,600 km and with an annual capacity of 18 billion cubic meters (bcm) – equivalent to 13.2 tons of LNG – the ARP will enable both Mozambique and South Africa to increase access to fuel for industry and power generation, while reducing reliance on other fossil fuels. Scheduled for completion in 2025 for the Mozambican segment of the pipeline and 2026 for the South African segment, the ARP is expected to boost southern Africa’s competitiveness through job creation and economic revitalization.

The Tanzania-Uganda Natural Gas Pipeline
The Tanzania-Uganda Natural Gas Pipeline Project is a proposed natural gas pipeline transporting LNG from Dar es Salaam, Tanzania, to Kampala, Uganda. The 1,800 km pipeline will connect Tanzania’s abundant gas reserves with Uganda’s growing steel industry, generating economic growth through industrialization. The project is expected to commence operations in 2026.

The Ajaokuta-Kaduna-Kano Natural Gas Pipeline
The Ajaokuta-Kaduna-Kano Natural Gas Pipeline (AKKP), part of the Trans Nigeria Pipeline Project, is a planned natural gas pipeline that will transport natural gas from Ajaokuta in Kogi State to Kano, in Kano State, Nigeria. The 614 km pipeline is intended to establish a connection between pipeline networks in the various regions of the country and to the wider region through the Trans Nigeria Pipeline Project. The estimated cost of the project is $2.8 billion and construction commenced in July 2020

The Trans-Sahara Gas Pipeline Project
The Trans-Sahara Gas Pipeline Project (TSGP) is a proposed 4,400 km natural gas pipeline that aims to connect Nigeria’s resources to Hassi R’Mel in Algeria, linking to a wider regional network of pipelines including the Trans Nigeria Gas Pipeline, the Maghreb-Europe Gas Pipeline and the Medgas Gas Pipeline. The $21 billion TSGP was officially launched in 2001 with a Memorandum of Understanding between Nigeria and Algeria and is expected to have an annual capacity of 30 bcm. Despite delays over the last decade, the TSGP re-emerged in planning documents in 2019, when the Trans Nigeria Gas Pipeline advanced into developmental phases.

One of the key challenges for cross-border pipeline development involves the securing of adequate funding as the high-costs of such infrastructural developments often prevents project take-off. Therefore, the integration of public and private sector financing will prove important to the success of intra-African pipeline projects. Additionally, intra-African projects rely on cooperation between multiple nations in which policy, legal and sectoral differences may cause challenges. Political will and regional regulatory alignment are essential to the realization of Africa’s regional gas pipelines.

Intra-African Gas Pipelines: Operational And Upcoming Projects

Greater energy access and regional connectivity can be realized through new regional pipeline projects.

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