South Sudan says oil pipeline via Kenya to cost $3 billion

NAIROBI (Reuters) - A pipeline allowing South Sudan to export its oil via the Kenyan port of Lamu, freeing the landlocked country from reliance on a route through Sudan, will cost $3 billion, Finance Minister Kosti Manibe said.

Manibe said that although South Sudan did not have the money to pay for the pipeline's entire cost, the newly independent country would invest in the project and had the necessary reserves of crude to offer guarantee to any financiers.

"The 2,000 km pipeline will cost approximately $3 billion dollars," he told a press conference in Nairobi on Friday.

"We don't need to have the money right now, we have the reserves," he said. "South Sudan will definitely have equity in the pipeline," he added.

South Sudan seceded from Sudan last year and the two countries have disagreed over how much the Juba government should pay to transport its oil output through Sudan.

They reached an interim deal last Friday, ending a row that led to the shutdown in January of southern oil production of 350,000 barrels per day.

Oil is essential to both economies and made up 98 percent of South Sudan's budget.

China was the biggest buyer of South Sudanese oil before the shutdown, and Chinese state firms are the biggest oil operators in the world's youngest country.

In January, South Sudan signed an agreement with neighbouring Kenya, the region's largest economy, to build the pipeline to connect its oil fields with Lamu, which is under construction.

(Reporting by Kelly Gilblom; Editing by James Macharia and Anthony Barker)

Source: http://news.yahoo.com/south-sudan-says-oil-pipeline-kenya-cost-3-132109166--finance.html

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