Kenya and China mull massive corridor for Sudanese oil

Oct 15, 2009 02:00 AM

Nairobi and Beijing are mulling a huge project to develop a port on the Kenyan coast and a corridor creating a new export route for China's oil in Sudan's secessionist south.
China's involvement would come as an alternative to a project floated last year in which Qatar would have invested $ 3.5 bn in the port in exchange for a lease on a huge tract of land to grow crops. The ambitious project would be a key issue during a trip to China by Kenyan Prime Minister Raila Odinga.

The energy-hungry Asian giant, the world's third largest economy, is the biggest foreign player in Sudan's oil sector and gets 5 % of its crude oil from the Africa nation. One of China's top state-owned energy groups is expected to start prospecting in northern Kenya soon.
A large port in Lamu, currently one of Kenya's tourism jewels, would offer an outlet should China strike oil in the area but it would also provide a route for its concessions in Sudan. Most of Sudan's oil is in the south -- which has a semi-autonomous status and is to hold a referendum on independence in 2011 -- or in disputed border areas.

The vast majority of Sudan's oil is currently exported through the north and the Red Sea harbour of Port Sudan. Tension has been high in recent months between Khartoum -- of whom China has been a precious international ally in recent years -- and the government of South Sudan.
The south is expected to overwhelmingly choose independence in 2011 but with the current infrastructure the newly-independent landlocked state would have to negotiate with the north to export its oil.

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