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South Sudan to Truck Oil Through Ethiopia, Djibouti for Export

March 14 (Bloomberg) -- South Sudan’s government said it signed an agreement with Ethiopia and Djibouti that may enable the East African nation to export oil by truck from July, while a study on a pipeline linking the three countries is completed.

An accord signed on March 12 in the Ethiopian capital, Addis Ababa, envisages crude being exported via Djibouti’s Red Sea port of Douraleh, South Sudan Deputy Petroleum Minister Elizabeth James Bol said in an interview today. Douraleh is 1,469 kilometers (913 miles) northeast of Juba, the South Sudanese capital.

“We need to wait for a technical assessment to be done first, but Ethiopia and Djibouti agreed for the oil to be exported by trucks through their countries,” Bol said.

South Sudan is considering building two pipelines, one via Ethiopia and another across Kenya to the port of Lamu, as an alternative to the conduit that runs through neighboring Sudan. South Sudan halted oil production in January 2012 after accusing Sudan’s government of stealing $815 million worth of its crude, a charge the Khartoum administration denied. The two nations agreed on March 12 to resume production and exports.

ILF Consulting Engineers of Germany has been asked by South Sudan, Djibouti and Ethiopia to carry out a feasibility study on the plan to export oil by truck, Bol said. The study will examine issues including the suitability of the countries’ roads and is expected to be completed in four months, she said.

ILF’s main focus will be to assess the feasibility and engineering plan for the pipeline to Douraleh, Bol said.

“The long-term goal is the pipeline,” she said. “Sending the oil by truck is only a short-term measure till the pipeline is finished.”

South Sudan seceded from Sudan in July 2011, taking control of about three-quarters of the formerly united country’s output of 490,000 barrels of oil a day. Oil in South Sudan is pumped mainly by China National Petroleum Corp., Petroliam Nasional Bhd of Malaysia and India’s Oil & Natural Gas Corp.

To contact the reporter on this story: Paul Richardson in Nairobi at pmrichardson@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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