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S. Sudan says Japan to construct alternative oil pipeline

June 1, 2013 (JUBA) - South Sudan said Japanese Toyota Company has accepted to construct an alternative oil pipeline from the landlocked nation to the Kenyan Port of Lamu.

President Salva Kiir and the delegation meeting the Toyota team (goss)

The decision, according to South Sudan’s commerce, trade and industry minister, came during a meeting between President Salva Kiir and Toyota’s chairperson, Junzo Shimizu.

“The president met and held talks with the chairperson of the Japanese Toyota company and discussed number of issues. One of the things which were discussed was the construction of the alternative oil pipeline. The meeting was successful one.

The chairperson of the Toyota Company had accepted to construct the alternative oil pipeline to the Lamu port”, Garang Diing Akuong told the state-owned television (SSTV).

President Kiir and Shimizu, the minister added, also discussed ways of how Toyota can benefit from the existing business opportunities in the country.

He did not, however, reveal how much money was required for construction of the new pipeline, estimated by the state-owned television to be about $4bn.

Construction of the oil pipeline is expected to boost South Sudan’s oil export, given that the landlocked country solely relies on transport facilities that pass through neighbouring Sudan.

In March 2012, heads of states from Kenya, Ethiopia and South Sudan convened Lamu, a Kenyan town on the Indian Ocean, to launch the construction of a port and oil pipeline said to be costing up to $16 billion. The Lamu project is widely seen as the best option to South Sudan crude oil exports.

Five months later, Kenya and South Sudan signed a memorandum of understanding to develop and expand a framework of cooperation and partnership between the two states on the principle of equality, mutual benefit, mutual understanding, respect and trust.

The areas of cooperation included the development of a crude oil pipeline between the oil fields of South Sudan and the port of Lamu.

A halt in South Sudan’s oil production, early last year, prompted the land locked country to devise alternative ways of managing its oil resources, which account for nearly 98% of the country’s annual budget.

Meanwhile, Akuong said Kiir, who is currently on a visit to Japan, also held separate talks with the Japanese prime minister, during which the South Sudan leader lauded the cooperation between the two countries.

Kiir, the minister noted, specifically thanked the government of Japan and its business groups for services extended to the new nation in the areas of humanitarian assistance and development.

“The president met today and held talks with [the] Japanese prime minister and senior members of the Japanese government. It was fruitful meeting. The president commended the government of Japan for cooperation and assistance in various areas,” Akuong said.

The two leaders, he added, accepted to work together to strengthen bilateral relations between them and promote investment for business communities in various areas within South Sudan.