Sudan has been self-sufficient in producing petroleum
July 16, 2004 (LiquidAfrica) — Sudan has been self-sufficient in producing petroleum products (except jet fuel) since the June 2000 opening of the 50,000-bbl/d Khartoum Oil Refinery in the Jayli area, 30 miles north of Khartoum.
The Khartoum refinery, built and jointly operated by CNPC, produces benzene and butane gas for domestic consumption and export, as well as gasoline for local consumption.
A portion of the surplus gas eventually will be used in the production of electricity, according to government officials. Following the opening of the Khartoum refinery, the price of gasoline was reduced considerably throughout the country and the price of gas cylinders, which Sudanese use for cooking, dropped from $5.30 to $2.60.
In June 2004, the Indian government approved plans by ONGC for a $194 million project aimed at building a 450-mile petroleum products export pipeline running from the Khartoum refinery to Port Sudan. The project is to be completed in around 14-16 months.
The Sudanese government is planning to expand the capacity of its oil refineries at Khartoum and Port Sudan, to 100,000 bbl/d each. The Port Sudan facility, located near the Red Sea, is Sudan’s smallest refinery and has a current capacity of 21,700 bbl/d.
The Khartoum plant had crude refining capacity of 50,000 bbl/d as of January 1, 2004, but this reportedly increased to 70,000 bbl/d in late June 2004. CNPC is working to upgrade the facility (at a cost of $340 million) and also to build a pipeline from the Fula oil blocks in Western Kordofan to the refinery.
Aside from the Port Sudan and Khartoum facilities, Sudan has two other refineries — El Gily, with a capacity of 50,000 bbl/d; and El Obeid, with a capacity of 10,000 bbl/d.
In March 2003, Petronas acquired Mobil Oil Sudan’s oil distribution network for an undisclosed amount of money. Mobil Oil Sudan held a 20% share in the country’s oil product market.
Petronas also acquired three oil storage depots, at Port Sudan, Khartoum, and Gaili. In August 2000, Sudan’s National Petroleum Company announced plans to lay pipelines to supply Eritrea and Ethiopia with petroleum products from its Khartoum refinery.
Eritrea has not yet benefited from Sudanese oil and relations between the two countries soured in April 2003 when Sudan accused Eritrea of supporting Sudanese rebels in the eastern part of Sudan. Although Eritrea denies the charges, future trade relationships are unlikely under the current climate.
Sudan has plans to export oil to fellow members of COMESA (the Common Market for Eastern and Southern Africa), including neighboring Kenya. Exports may be delayed, however, by concerns over human rights issues in Sudan, and some Kenyan officials have called for a boycott of Sudanese oil.
In April 2002, Sudanese and Kenyan government officials announced that they are working on logistics for the construction of a new pipeline that would link oil fields in Sudan to the Kenyan port in Mombasa. Under COMESA, trade within the zone is not subject to tariffs, which means that Sudanese oil likely will be cheaper for COMESA members than other alternatives.