South Sudan to build refinery despite oil supply disruption

August 27, 2024 (Juba) – Despite disruptions in crude oil production and flows, South Sudan is building an oil refinery, a move that provides an opportunity to reduce logistics and imports of fuel and other energy products.

The construction of the new refinery will be undertaken by the Chinese company Shengli Oilfield Keer Engineering and Construction Company (Sokec).

The South Sudan National Oil Corporation (Sokec) on Friday reached an agreement with state-owned Nile Petroleum Company (Nilepet) to build a modern refinery and storage facilities in South Sudan.

Sokec president Wu Song and Nilepet managing director Muhammad Lino Benjamin signed a memorandum of understanding (MoU) under which the Chinese company will immediately start investing in the country.

Benjamin expressed his appreciation for Sokek’s contribution to South Sudan’s development.

“We hope that you will be able to translate this into agreements and projects that we will do together,” he said at the signing ceremony of the agreement in Juba, South Sudan.

However, Mr Goh said Sokec would not hesitate to invest to increase production capacity and operational efficiency.

“We will start preparations at refineries and storage facilities as soon as possible,” he said.

A high-level delegation from the Chinese company visited the oil fields in Targiat, Unity State, on Monday to inspect the facilities and assess the current operations of the refinery.

Meanwhile, Kuol Deng Maleith, general manager of Nile Petroleum’s midstream division, said the visit of Chinese company representatives represented an important step in the modernization and expansion of South Sudan’s oil industry.

He stressed the critical role that international investors play in the continued development of the country’s oil sector and its broader economic growth.

South Sudan is one of the oil producing countries but it has not had a refinery built and operating since its secession from Sudan. The construction and completion of the new refinery is expected to end the dependence on imports for these fuels. This will also solve their long-standing logistics problems. This also means that gasoline will be cheaper in South Sudan as the cost of imports will be reduced.

Others hope refinery deals will reduce costs for middlemen, who often drive up operating costs.

(English stone)