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Kenya strikes power-for-crude deal with South Sudan
KENYA
KENYA has struck a two-year oil-for-power deal with neighbouring South Sudan.
e deal emerged a er South Sudan Pres- ident Salva Kiir visited the Olkaria geothermal plants in Kenya at the start of July.
Kenyan Energy Cabinet Secretary Charles Keter said that work had begun on building a transmission line to Lodwar for onward trans- mission of geothermal power to South Sudan.
“We are engaging our brothers from South Sudan so that Kenya can get gas from the oil elds, while they in return will get electricity,” Keter said.
South Sudanese Petroleum Minister Dan- iel Awou said that his country needed more electricity.
Kenya plans to build a new transmission line from the Olkaria region to Lodwar in the north of the country, where a cross-border connection could be extended to South Sudan.
The Kenyan government also intends to donate land in the Olkaria geothermal elds to South Sudan for the development of an indus- trial park in the Naivasha Special Economic Zone.
Before war broke out in South Sudan in 2013, oil production peaked at 350,000 barrels per day (bpd). Since then, output has slumped to 130,000 bpd.
e country has proven reserves of 3.5 bil- lion barrels of oil, with production carried out by consortia led by Malaysia’s Petronas, China’s
CNPC and India’s ONGC Videsh Ltd (OVL). As well as South Sudanese oil, Nairobi is also keen to invest in South Sudan’s geothermal potential, following on from Kenya’s considera-
ble activity in Ethiopia.
South Sudan is reliant on its northern neigh-
bour Sudan to transport its crude to market, and relations between the two have rarely been stable since the south declared independence in 2011. is means that any deal with Kenya to boost oil trading southwards would be welcomed by South Sudan.
KenGen CEO Rebecca Miami said that South Sudan had the potential to o er 400 MW of geo- thermal power.
“Kenya is ranked ninth in terms of geother- mal production in the world and we are ready to o er expertise and advice to South Sudan,” she said.
The country has a geothermal installed capacity of 685 MW with an estimated potential of 10,000 MW along the Ri Valley. As the 165- MW Olkaria 5 geothermal plant comes online this summer, Kenya’s capacity will rise to 850 MW.
e oil-for-power deal accompanied a num- ber of other cross-border trade deals that were unveiled during Kiir’s visit.
e two countries are developing the Chi- nese-backed Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) corridor, which includes a major oil export pipeline.™
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w w w . N E W S B A S E . c o m Week 27 10•July•2019