Home | News    Friday 29 August 2003

CNPC to build new Sudan pipeline, expand refinery

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By Alfred Taban

KHARTOUM, Aug 29 (Reuters) - Sudan signed two contracts with the Chinese National Petroleum Co (CNPC) late on Thursday to construct the country’s second major oil pipeline and expand a refinery in the capital Khartoum.

Sudan currently uses a 1,600-km (1,000-mile) pipeline to export its crude through the port of Bushair, near Port Sudan on the Red Sea.

The new 200,000-barrel-per-day (bpd) pipeline to be constructed by CNPC would run from al-Fula, Sudan’s main oil production area about 730 km (460 miles) south-west of Khartoum, to the refinery in the capital.

Work is expected to begin at the end of this year. It was not immediately clear when the pipeline would come on stream.

Energy Minister Awad Ahmed al-Jaz and Finance Minister al-Zubeir Ahmed al-Hassan also signed a contract with CNPC to expand the capacity of the Chinese-built oil refinery in Khartoum to 100,000 bpd from 58,000 at a cost of $340 million.

Jaz said a third new pipeline to carry oil from Upper Nile state in southern Sudan and White Nile state in northern Sudan would be contructed next year. He did not say who would build that pipeline.

Jaz also said work was under way to expand the capacity of the Port Sudan refinery to 100,000 bpd from 25,000.

The CNPC deals were among several agreements signed between budding oil producer Sudan and foreign oil firms on Thursday.

Malaysia’s national oil company Petroliam Nasional Bhd (Petronas) [PETR.UL] said on Friday it had been awarded a new petroleum exploration block in Sudan, its eighth in Africa’s largest country.

Petronas will hold a 77 percent interest in the block, known as Block 8, with 15 percent going to Sudan’s Sudapet and the rest to Sudanese firm High Tech Group, Petronas said.

The block, covering an area of 65,856 sq km (25,430 sq mile), is located within the Blue Nile basin, northeast of Sudan’s Melut basin.

Sudan also signed its first oil exploration contract with Pakistani firm Zaver Petroleum Corporation Limited. The deal covers block nine in the state of Khartoum and parts of Nile River, al-Gezira, Northern Kordofan and White Nile states.

Zaver’s Managing Director Tahir Sher Mohamed told Reuters in Khartoum that work would begin immediately on the concession, which measures about 1,000 by 750 km (625 by 470 miles).

He said the contract was worth $23 million and would end in about three years. "I believe the prospects are good," he said.

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