Lamu Port-South Sudan (LAPSSET) Pipeline
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Lamu Port-South Sudan (LAPSSET) Pipeline is a proposed oil pipeline in South Sudan and Kenya.[1]
Location
The LAPSSET Corridor was proposed after the Lokichar–Lamu Oil Pipeline was originally proposed as the Kenya Crude Oil Pipeline. The latter is now presumed to be a segment of the larger LAPSSET Corridor, which includes a segment connecting South Sudan to Lokichar.
Project details
South Sudan–Lokichar Oil Pipeline Segment
The first segment would run from South Sudan oil fields to Lokichar, Kenya, where it would connect to the Lokichar–Lamu Oil Pipeline Segment, which ends at Kenya's Lamu Port, for export.[2][3]
- Operator:
- Owner: Tullow Oil [50.00%]; Africa Oil [25.00%]; TotalEnergies SE [25.00%][4]
- Parent company: Tullow Oil [50.00%]; Africa Oil [25.00%]; TotalEnergies SE [25.00%][4]
- Capacity: 160,000 bpd
- Diameter:
- Length:
- Status: Proposed
- Start year: 2024[5]
- Originally 2021
- Cost:
- Financing:
- Associated infrastructure:
Lokichar–Lamu Oil Pipeline Segment
The pipeline would originate in the South Lokichar Basin, near the town of Lokichar, Turkana County, in northwest Kenya, and would end at a new port to be constructed at Lamu, Lamu County, on the Indian Ocean.[6]
- Operator:
- Owner: Tullow Oil [50.00%]; Africa Oil [25.00%]; TotalEnergies SE [25.00%][4]
- Parent company: Tullow Oil [50.00%]; Africa Oil [25.00%]; TotalEnergies SE [25.00%][4]
- Capacity: 89,000 barrels per day[7][8]
- Diameter: 18 inches[9]
- Length: 821 km[10][8]
- Status: Proposed[5]
- Start year: 2024[5]
- Originally 2021
- Cost:
- Financing:
- Associated infrastructure:
Background
Original Kenya Crude Oil Pipeline
Originally Kenya partnered with Uganda to export Kenya oil through a joint pipeline to Port Lamu on the Indian Ocean coast.[11] When those plans fell through, Kenya announced it would build its own pipeline from Lokichar to Lamu.[12][13][14] The pipeline is now referred to as the Lokichar–Lamu Oil Pipeline, and is part of the LAPSSET Corridor.
In November 2016, the British oil conglomerate, Tullow Oil Plc, indicated that it would sign an agreement with the Government of Kenya, before the end of 2016, which would pave the way for the construction of the Kenya Crude pipeline. The joint venture would involve African Oil Limited and Maersk Oil, two other companies with oil exploration rights in northwestern Kenya. The joint venture agreement was planned to be followed by studies on the pipeline’s technical requirements as well as its financing and ownership structure.[15] At the time, in 2016, it was expected that the construction of this pipeline would commence in 2018 and last until 2021. The construction cost is budgeted at KES:210 billion. The pipeline would carry up to 120,000 barrels of crude oil per day.[15]
By 2017, the likelihood of Tullow Oil moving forward with the pipeline construction project had increased. In May 2017, Tullow Oil discovered more oil deposits at its Ngamia-1 oil rig in the Turkana oil fields in Northern Kenya. The company announced plans under which the pipeline project would undergo an environmental and social impact study along with further studies of the site's oil reserves and their corresponding value. These studies would ultimately decide whether the pipeline is viable or not in the eyes of the oil companies.[16]
In January 2018, oil giant Total, which owns rights to some of the oil fields in the South Lokichar Basin, joined the pipeline project. At some point, the Canadian firm Africa Oil also joined the project.[17] In April 2018, the Kenyan government chose British firm Wood Group to design the pipeline.[18] In June 2019, the Kenyan government signed an agreement with Tullow and Total to build a crude oil processing facility at the South Lokichar Basin fields; at the time, Tullow had not yet reached a final investment decision, but said it planned to by the end of 2019.[19]
In July 2019, surveying of the pipeline's route began. At the time, delays in land acquisition and permitting were slowing down the progress of the project.[20] In November 2019, contractor Wood Group presented Tullow and Total with two different options for the pipeline: a pipeline with onshore storage facilities, at a cost of $1.2 billion, or a pipeline with floating storage facilities, at a cost of $1.1 billion. At the time, final environmental permits were expected in Q1 2020. The pipeline would be 18 inches, would cover a distance of 824 km, and would have a capacity of 65,000 barrels per day, expandable to 80,000.[21]
In January 2020, the project's future began to look more uncertain, after it was reported that Tullow, due to financial underperformance in other projects, was potentially looking to sell all of its 50% stake in the project, and that Total was looking to potentially sell half of its 25% stake. At that time Tullow said that it was aiming to reach a final investment decision by the end of 2020, calling the timeline "challenging."[22][23] In February 2020 it was announced that Tullow intended to lay off up to 325 of its Kenya staff, putting the project's future further in doubt.[24] In May 2020, Tullow reportedly declared force majeure in its contract with the Kenyan government, blaming problems caused by Covid restrictions and the Covid-induced collapse in oil prices.[25] The Kenyan government restated its commitment to the project, but pushed the target date for completion back to 2023.[26]
In September 2021, Tullow released a revised development plan for oil production in Kenya which foresees greater production volumes from the Turkana oil field than previously planned. On approval of the plan and the securing of a strategic partner, the company said that a final investment decision could then follow, though did not state a timeline for this. Construction of the pipeline, expected to take three years, is still planned.[27]
LAPSSET Corridor Program
As of 2016, Kenya was pursuing plans to link its proposed Kenya Crude Oil Pipeline, also known as the Lokichar–Lamu Oil Pipeline, planned for commissioning in 2021, with a new pipeline to South Sudan's oil fields, for increased oil export through Kenya's Lamu Port.[28] The LAPSSET Corridor Program includes Kenya, Ethiopia, and South Sudan. The project consists of major highway, crude and product oil pipelines which aim to further integrate the region. Regarding South Sudan, the crude oil pipeline will connect Lamu to Isiolo to Juba.[29]
The project itself has run into multiple difficulties regarding its partners. Uganda left the project in favor of linking its gas infrastructure with Tanzania. Similarly, Ethiopia's commitment looks precarious due to its recent partnership with Djibouti to build the Horn of Africa Pipeline. South Sudan's support remains inconclusive due not only to its internal conflict but also very low oil prices. However, Kenya seeks to continue with the massive project.[30]
As of 2017, Total has attempted to persuade Kenya to join the Uganda and Tanzania oil project rather than continue with the LAPSSET corridor. However, Kenya Civil Society Platform on Oil and Gas's coordinator Charles Wanguhu stated that Kenya remains committed to its partnership with South Sudan.[31]
In August 2019, LAPSSET officials met with community members in Lamu as part of the project's Environmental and Social Impact Assessment permitting process. They told community members that the project would hire more than 600 local youth. The 820km pipeline is a key element of the Lamu Port South Sudan Ethiopia Transport (LAPSSET) project being undertaken at Kililana in Lamu West. The pipeline, which will cut through Turkana, Samburu, Isiolo, Meru, Garissa and Lamu counties, will transport stabilised crude oil from the South Lokichar Basin to the Port of Lamu. At the time, LAPSSET officials stated that groundworks for the pipeline would begin before the end of 2020.[32] Also in August, LAPSSET officials appealed to the African Union for help security the KSh 2.5 trillion, or about $25 billion, that the project would cost in total. (This project cost is equal to about 1/4 of Kenya's annual GDP, and is six times larger than South Sudan's GDP.)[33] In January 2020 the African Union "adopted" the LAPSSET project; this adoption is apparently above all an endorsement aimed at helping the project secure foreign investment.[34] It would seem that financing is likely the main holdup for the project.
Articles and resources
References
- ↑ Lamu Port-South Sudan (LAPSSET) Pipeline, Wikipedia, accessed September 2017
- ↑ sihle (2022-02-08). "South Sudanese Oil to Unlock Development in Northern Kenya". Retrieved 2022-02-24.
- ↑ Tibaldeschi, Paolo (July 2019). "RAPID RISK ASSESSMENT OF THE LOKICHAR -LAMU CRUDE OIL PIPELINE 2019 Rapid Risk Assessment Report Rapid Risk Assessment of the Lokichar -Lamu Crude Oil Pipeline". Research Gate. Retrieved September 28, 2022.
{{cite web}}: CS1 maint: url-status (link) - ↑ 4.0 4.1 4.2 4.3 "Kenya targets South Lokichar crude FID by mid-2022 | Argus Media". www.argusmedia.com. 2021-11-11. Retrieved 2022-02-24.
- ↑ 5.0 5.1 5.2 "Kenya targets South Lokichar crude FID by mid-2022 | Argus Media". www.argusmedia.com. 2021-11-11. Retrieved 2022-02-24.
- ↑ "Lokichar–Lamu, Kenya". Offshore Technology. November 1, 2021.
{{cite web}}: CS1 maint: url-status (link) - ↑ Njiraini Muchira, Kenya gets two design options for Lamu crude pipeline project, The East African, 24 Nov. 2019.
- ↑ 8.0 8.1 "https://lapsset.go.ke/oil-pipelines/".
{{cite web}}: External link in|title= - ↑ Kenya Crude Oil Pipeline, Wikipedia, accessed September 2017
- ↑ "Lokichar–Lamu, Kenya". Offshore Technology. November 1, 2021.
{{cite web}}: CS1 maint: url-status (link) - ↑ Kakwanja, Peter (27 March 2016). "Kenya's interests must prevail in Uganda oil pipeline debacle". Daily Nation. Nairobi. Retrieved 24 April 2016.
- ↑ "Uganda picks Tanzania for oil pipeline, drops Kenya plan". BBC News. 23 April 2016. Retrieved 24 April 2016.
- ↑ Wachira, George (26 April 2016). "Fast track Turkana-Lamu pipeline to beat Uganda to global oil markets". Business Daily Africa. Nairobi. Retrieved 26 April 2016.
- ↑ Reuters (2 May 2016). "Kenya targets to complete Sh210 billion pipeline by 2021". Business Daily Africa Quoting Reuters. Retrieved 2 May 2016.
{{cite web}}:|author=has generic name (help) - ↑ 15.0 15.1 Mutegi, Mugambi (9 November 2016). "Tullow Oil set to sign pipeline deal with Kenya before year end". Business Daily Africa. Nairobi. Retrieved 10 November 2016.
- ↑ Abel MuhatiaMore Turkana oil find boosts pipeline plans, The Star, May 18, 2017
- ↑ George Omondi, Total strikes deal to build Kenya’s Lamu crude oil pipeline, Business Daily Africa, 24 Jan. 2018.
- ↑ Allan Olingo, Kenya 2022 oil plan back on track as UK firm takes up pipeline design, The East African, 28 Apr. 2018.
- ↑ Kenya signs milestone crude processing deal with oil firms, Reuters, 25 June 2019.
- ↑ Njiraini Muchira, Kenya now lays ground for crude oil pipeline, The East African, 27 July 2019.
- ↑ Njiraini Muchira, Kenya gets two design options for Lamu crude pipeline project, The East African, 24 Nov. 2019.
- ↑ Ron Bousso, Bate Felix, & Shadia Nasralla, Total and Tullow launch joint sale of stakes in Kenyan oil project: sources, Reuters, 23 Jan. 2020
- ↑ Ian Lewis, Tullow hopeful of Kenya FID this year, Petroleum Economist, 21 Feb. 2020.
- ↑ Edwin Okoth, Tullow job cuts in Kenya deepen oil export doubts, The East African, 9 Feb. 2020
- ↑ Macharia Kamau, Coronavirus puts a damper on Kenya’s oil project as firms notify govt they will fail to meet contractual obligations, The Standard, 17 May 2020
- ↑ Edwin Mutai, Kenya continues its pipeline plan as oil prices drop, Business Daily Africa, 14 May 2020
- ↑ Elizabeth Mbithe, Tullow Oil raises Kenya’s crude oil project cost, Pumps Africa, Sep. 16, 2021
- ↑ "Kenya woos S. Sudan after oil pipeline deal with Uganda collapses," Daily Nation, May 3 2016
- ↑ What is the LAPPSET Corridor Program?, LAPPSET, accessed September 2017
- ↑ Vincent Achuka, Kenya to soldier on even as partners in Lapsset pull out, Daily Nation, accessed March 6, 2016
- ↑ Kennedy Senelwa, Kenya: Decision on Pipeline Route Could Strain Kenya, Total Relations, The East African, September 19, 2017
- ↑ Cheti Praxides, Lokichar-Lamu pipeline to employ 600 youths, The Star, August 10, 2019.
- ↑ Kenya seeks financial support for LAPSSET project from African Union, Logistics Update Africa, 19 Aug. 2019.
- ↑ Anthony Kitimo, Lapsset project adopted by AU in move to boost continent’s free trade area, The East African, 19 Jan. 2020.
