Total Project Cost
Investment Required
Stakeholders
Countries
Project Overview
Description
The LAPSSET Crude Oil Pipeline is a strategic infrastructure project to transport crude oil produced in South Sudan and the Lokichar Basin in Kenya to the new deep-water port at Lamu on Kenya's coast. The pipeline forms a critical component of the broader Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) Corridor Program, one of Eastern Africa's largest and most ambitious infrastructure initiatives. The pipeline will enable commercial development of oil reserves in both countries, provide a secure export route, and catalyze economic development along the corridor.
Objectives
The project aims to: (i) establish a commercially viable export route for crude oil from South Sudan and Kenya's Lokichar Basin; (ii) reduce transportation costs compared to current alternatives; (iii) enhance energy security and economic development in the region; (iv) generate revenue for host governments through tariffs, taxes, and potential equity participation; (v) create employment opportunities during construction and operation; (vi) catalyze economic development along the pipeline corridor; (vii) strengthen regional integration between Kenya and South Sudan; and (viii) provide a foundation for potential expansion to other oil-producing regions in East Africa.
Strategic Importance
The LAPSSET Crude Oil Pipeline represents a transformative project for Eastern Africa's energy sector and regional integration agenda. For South Sudan, the pipeline offers a strategic alternative export route, reducing dependence on existing infrastructure through Sudan and associated geopolitical vulnerabilities. For Kenya, it provides the critical export infrastructure needed to commercialize oil discoveries in the Lokichar Basin, transforming the country into an oil-producing nation. The pipeline is a cornerstone component of the broader LAPSSET Corridor Program, which aims to establish a new transport and economic corridor linking Kenya, South Sudan, and Ethiopia. This infrastructure network has been designated as a Presidential Infrastructure Champion Initiative (PICI) project by the African Union and is expected to enhance regional trade, boost economic integration, and position Eastern African economies for greater global competitiveness. Beyond immediate economic benefits, the project has strategic importance for diversifying export routes for landlocked South Sudan and establishing Kenya as a regional energy hub.
Technical Specifications
Technology & Design
The pipeline will employ modern crude oil transportation technology appropriate for the waxy, paraffinic crude characteristics found in both South Sudan and Kenya's Lokichar Basin. Key design elements include: (i) heated pipeline (approximately 60-80°C) to maintain crude fluidity; (ii) buried steel pipeline with fusion-bonded epoxy coating and cathodic protection; (iii) fiber optic-based leak detection and monitoring systems; (iv) pipeline insulation to maintain temperature and minimize heating requirements; (v) strategically located pump stations with heating facilities; (vi) pressure monitoring and control systems; and (vii) modern terminal facilities at origin and destination. The design will incorporate environmental safeguards and energy efficiency considerations.
Capacity & Size
The crude oil pipeline will extend approximately 820-850 km from oil fields in South Sudan and Kenya's Lokichar Basin to the Port of Lamu. Key technical parameters include: (i) pipeline diameter: 18-24 inches (to be finalized based on throughput requirements); (ii) initial capacity: 250,000-300,000 barrels per day; (iii) operating temperature: 60-80°C; (iv) estimated pumping stations: 6-8 along the route; (v) terminal storage capacity at Lamu: 1-1.5 million barrels; and (vi) marine loading facilities at Lamu capable of accommodating vessels up to Suezmax class (150,000 DWT).
Technical Details
Technical specifications include: (i) Pipeline: 18-24 inch diameter (final size to be determined), API 5L X70 grade steel, fusion-bonded epoxy coating with potential additional layers for thermal insulation; (ii) Design pressure: approximately 10-12 MPa; (iii) Wall thickness: varying based on terrain and pressure requirements, typically 9-14 mm; (iv) Pump stations: electric-driven centrifugal pumps with heating systems; (v) SCADA system with fiber optic communications for real-time monitoring and control; (vi) Leak detection system: combination of computational pipeline monitoring and fiber optic sensing; (vii) Cathodic protection system for corrosion prevention; (viii) Sectionalizing valves at approximately 30 km intervals; and (ix) Terminal facilities with tank farms, metering systems, and marine loading arms.
Development, Implementation & Financial Details
Development Timeline
The project development timeline includes: (i) Pre-feasibility and concept development (2012-2018); (ii) Project definition and initial technical studies (2018-2023); (iii) Detailed feasibility studies and ESIA (2023-2025); (iv) Project structuring and financing arrangements (2025-2027); (v) Front End Engineering Design (FEED) and contractor procurement (2027-2028); (vi) Construction and commissioning (2028-2032). Current status is Project Definition/Structuring (S1).
Latest Implementation Updates
UPDATED2024-01-30: Lamu Port’s first deep-water berth became operational – https://lapsset.go.ke/2024/01/30/testing-news/
Financing Structure
The financing structure is expected to follow an integrated project finance approach combining: (i) equity contributions from host governments, potentially through national oil companies; (ii) equity from international oil companies operating in South Sudan and Kenya; (iii) commercial debt from international banks and export credit agencies; (iv) potential participation from development finance institutions for specific components; and (v) political risk guarantees to enhance commercial bankability. The exact structure will be defined through dedicated financing studies and market sounding activities.
Capital Structure
The anticipated capital structure is likely to include: 30-40% equity from project sponsors (national oil companies and international oil companies); 60-70% debt from commercial lenders and export credit agencies with potential enhancement through political risk guarantees. Initial estimates suggest a 70:30 debt-to-equity ratio as optimal given project characteristics and risk profile.
Project Timeline
Start Date
March 2012
Expected Completion
December 2032
Development Timeline
The project development timeline includes: (i) Pre-feasibility and concept development (2012-2018); (ii) Project definition and initial technical studies (2018-2023); (iii) Detailed feasibility studies and ESIA (2023-2025); (iv) Project structuring and financing arrangements (2025-2027); (v) Front End Engineering Design (FEED) and contractor procurement (2027-2028); (vi) Construction and commissioning (2028-2032). Current status is Project Definition/Structuring (S1).
Project Status History
Status 2020
Structuring
Status 2022
Project Definition
Status 2024
Project Definition
Additional Project Details
Construction Timeline
Construction is anticipated to span 48-60 months following financial close and contractor procurement, including: (i) detailed engineering and mobilization (6-8 months); (ii) procurement of major materials including line pipe, pumps, and control systems (12-18 months); (iii) right-of-way preparation and pipeline construction (24-36 months); (iv) pump station and terminal facility construction (30-36 months); (v) testing, commissioning, and first oil (6-8 months). Construction scheduling will account for seasonal constraints, particularly in areas with challenging terrain or intense rainy seasons.
Legal & Financial Advisors
Technical advisors for early stage studies include Shem Associates and ILF Consulting Engineers. Legal and financial advisory services expected to be appointed during project structuring phase.
Market Analysis
Market Analysis
Current oil production in South Sudan is approximately 150,000-170,000 barrels per day (bpd), transported through Sudan to Port Sudan on the Red Sea. In Kenya, the Lokichar Basin discoveries are estimated to contain 560 million barrels of recoverable oil reserves, with production potential of 60,000-80,000 bpd once export infrastructure is available. Market analysis indicates sufficient combined production volumes to justify the pipeline, with potential for additional discoveries in both countries and possibly Uganda enhancing long-term viability. Global oil market projections suggest continued demand for African crude, particularly light, sweet varieties with low sulfur content typical of East African discoveries.
Market Demand
The pipeline is designed with initial capacity of approximately 250,000-300,000 barrels per day (bpd), with the following breakdown: (i) South Sudan production: 150,000-180,000 bpd; (ii) Kenya Lokichar production: 60,000-80,000 bpd; (iii) Reserved capacity for future discoveries or third-country access: 40,000-60,000 bpd. This capacity sizing accommodates current production profiles while providing flexibility for future expansion.
Key Stakeholders
Project Sponsor
Governments of Kenya and South Sudan, with potential participation from International Oil Companies operating in both countries
Key Parties
LAPSSET Corridor Development Authority (Kenya), Ministry of Energy and Petroleum (Kenya), Ministry of Petroleum (South Sudan), National Oil Corporation of Kenya (NOCK), Nile Petroleum Corporation (Nilepet, South Sudan), Kenya Pipeline Company (KPC)
Investors
Potential investors include: Government of Kenya, Government of South Sudan, International Oil Companies operating in both countries, Development Finance Institutions (AfDB, IFC), Export Credit Agencies
Contractors & Operators
To be determined through international competitive bidding following project structuring and financing
Risk Assessment
General Risk Assessment
Key risks identified include: (i) Geopolitical uncertainties, particularly regarding South Sudan's stability; (ii) Technical challenges related to waxy crude characteristics and maintaining required temperatures; (iii) Environmental sensitivities along the route, including protected areas and water crossings; (iv) Social impacts and land acquisition requirements affecting multiple communities; (v) Commercial viability dependent on sustained production levels and oil price environment; (vi) Financing challenges given the scale of investment required; and (vii) Security concerns in certain regions along the route. Risk mitigation strategies are being developed for each category, with particular emphasis on commercial structure, security arrangements, and community engagement.
Regulatory Risks
Regulatory risks include: (i) Need for harmonized regulatory frameworks between Kenya and South Sudan for cross-border pipeline operations; (ii) Potential changes in fiscal terms affecting project economics; (iii) Environmental compliance requirements across multiple jurisdictions; (iv) Land acquisition and right-of-way regulations; and (v) Export permitting and marine terminal regulations. A dedicated intergovernmental framework is being developed to address these issues, building on precedents from other cross-border pipeline projects in Africa.
Impact Assessment
Environmental Impact
The project will require a comprehensive Environmental and Social Impact Assessment (ESIA) covering the entire pipeline route. Key environmental considerations include: (i) Potential impacts on protected areas and biodiversity hotspots along the route; (ii) Water resource protection, particularly at river and stream crossings; (iii) Management of heating requirements to minimize energy consumption and emissions; (iv) Spill prevention and response capabilities; (v) Waste management during construction and operation; and (vi) Climate change considerations including both adaptation measures and greenhouse gas accounting. The ESIA will develop detailed mitigation measures for each category of impact.
Social Impact
Social impacts include land acquisition affecting numerous communities along the 820-850 km route, with both temporary impacts during construction and permanent land-take for facilities and right-of-way. The project will create approximately 5,000-7,000 jobs during peak construction, with 300-500 permanent positions during operation. A comprehensive Resettlement Action Plan (RAP) will ensure fair compensation and livelihood restoration, while community development programs will enhance benefits for affected populations. The project will implement an Indigenous Peoples Development Plan where applicable, particularly in areas with vulnerable ethnic communities.
Investment Opportunities
Private Sector Opportunities
The project presents significant opportunities for private sector participation, including: (i) equity investment in the pipeline company; (ii) EPC contracting for pipeline and associated facilities; (iii) operations and maintenance services; (iv) supply of materials, equipment, and specialized services; (v) financing through commercial lending; (vi) development of ancillary infrastructure along the corridor; and (vii) provision of support services during construction and operation. The specific structuring of private involvement will be determined during the project development phase.
Next Steps & Agreements
Next Steps
Key next steps include: (i) completion of comprehensive technical feasibility studies; (ii) detailed environmental and social impact assessment along the proposed route; (iii) development of commercial framework including tariff structure and transportation agreements; (iv) finalization of intergovernmental agreements between Kenya and South Sudan; (v) engagement with potential financing partners; and (vi) establishment of project implementation structure.
Offtake Agreements
The project will require Transportation and Processing Agreements (TPAs) between the pipeline company and oil producers in both South Sudan and Kenya. These agreements will likely include: (i) ship-or-pay provisions to ensure revenue stability; (ii) quality specifications for crude acceptance; (iii) nomination and scheduling procedures; (iv) tariff structure and payment terms; (v) operational procedures including maintenance coordination; and (vi) force majeure provisions. Intergovernmental agreements between Kenya and South Sudan will establish the overarching framework for these commercial arrangements.
Contact Information
Eng. Odongo Kodongo, CEO, LAPSSET Corridor Development Authority, Email: info@lapsset.go.ke; Hon. Davis Chirchir, Cabinet Secretary, Ministry of Energy and Petroleum (Kenya), Email: cs@energy.go.ke; Hon. Puot Kang Chol, Minister of Petroleum (South Sudan), Email: info@mop-rss.org
