South Sudan Says It Will Build Oil Pipelines Worth $4 Billion

South Sudan is planning to spend as much as $4 billion to build pipelines to ship its oil through Kenya and Djibouti to reduce its reliance on neighboring Sudan, a deputy minister said.

“Within three years oil will start flowing” through the pipelines, Deputy Minister for Telecommunications and Postal Services Khamisa Wani-Ndah said today in an interview in Cape Town. South Sudan is in talks with international lenders and companies about the projects, she said, declining to name them.

South Sudan shut down its 350,000 barrels a day in oil production in January after accusing Sudan of stealing $850 million worth of its oil. Sudan said it confiscated the crude to make up for unpaid fees for shipping it through a pipeline to Port Sudan.

The government signed a memorandum with Ethiopia in February to build a pipeline via Djibouti, and said that it’s in talks with a Texas-based construction company to build another line to the Kenyan coastal town of Lamu.

South Sudan’s government, which relies on oil earnings for 98 percent of its revenue, has cut its annual budget by a quarter as a result of the crude shutdown.

To contact the reporter on this story: Sikonathi Mantshantsha in Cape Town at smantshantsh@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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