By MADING NGOR
South Sudan is set to become almost self-sufficient in oil
products within a year as two refineries enter production,
saving Africas newest nation foreign exchange it now uses
to buy diesel from neighbors.
By 2014, we would be 80% independent in terms of
requiring energy products from any other country, Paul
Adong Deng, managing director of state-owned Nile Petroleum
Corp., said in an interview from the capital, Juba.
I think by 2016-17, we will be entirely
South Sudans first refinery, which will process 5,000
bpd, will begin operating by Dec. 31 and a second one will
start by the end of 2014, bringing total processing capacity to
17,000 bpd of crude oil, he said.
The facilities are being built in the
oil-producing states of Unity and Upper Nile. The first, in
Bentiu, is a joint venture between Nile Petroleum and
Russias Safinat, with a 30%-70% equity split
respectively. It cost under $100 million, Deng
We envisage that before year-end, the construction would have been
completed and the commissioning would have taken place
after a six-month delay caused by the rainy season and poor
road conditions from Kenyas port of Mombasa, through
which the equipment was shipped from Russia, he said. Construction is yet to start on the
larger one in Thiangrial.
South Sudan imports as much as 40 million liters (10.6 million
gallons) of fuel a month from neighboring Kenya, Deng said.
About 80% of imports are diesel and 20% gasoline.
While South Sudan may review a decision to stop an
arrangement under which it was using the refinery near Sudans capital,
Khartoum, to process crude that was then trucked back to the
south, Deng ruled out relying on Sudan for its energy needs for
the foreseeable future, as a border conflict keeps
bilateral relations tense.
South Sudan seceded from neighboring Sudan in July 2011 and
took three-quarters of the formerly united countrys oil
output. The landlocked country currently exports all its crude,
about 220,000 bpd, through pipelines across Sudan. A dispute
between the two neighbors over export revenue halted South
Sudanese production last year, cutting the countrys
economy by half to $9.34 billion, according to World Bank
With the refinery operational, ultimately we
will no longer continue under the threat of shutdown,
Information Minister Mikael Makuei Lueth said in an interview.
Even if they shut down we will continue to refine our oil
Oil product smuggling across the northern border will
probably to drop after Sudans government removed
subsidies on fuel, Deng said. The removal of fuel subsidies
triggered protests in Sudan as the cost of energy and transport
Henry Dillah Odwar, who heads the parliamentary committee on
energy, said South Sudan still needs to build roads from the
refineries to Juba so it can bring fuel to the capital in the
rainy season. Nile Petroleum is studying the viability of
transporting the products by special barges as they
work on constructing all-weather roads, Deng said.
South Sudan has sub-Saharan Africas biggest oil reserves
after Nigeria and Angola, according to BP data. Its low-sulfur
crude, prized by Japanese buyers as a cleaner-burning fuel for
power generation, is pumped mainly by China National Petroleum
Corp., Malaysias Petroliam Nasional Bhd. and Indias Oil & Natural Gas