Ethiopia Wants to Pivot Oil Purchases to South Sudan From Middle East

(Bloomberg) -- Ethiopia is looking to buy oil from South Sudan to mitigate the higher cost of importing from the Middle East as demand continues to grow.

The Horn of Africa nation of 108 million people needs 4 million tons of refined oil products annually and demand is increasing by between 10% and 15% every year, Ethiopia’s State Minister of Mines and Petroleum Koang Tutlam told journalists in Juba, the capital of South Sudan. The imports cost as much as $3.4 billion a year, but could be cheaper if bought from its western neighbor, he said.

“You can imagine bringing from the Middle East when you can tap from just 200 kilometers in Pagak or further from Adar,” he said. Ethiopia is awaiting construction of a planned South Sudan refinery near their shared border, Tutlam said.

“We are expecting it could be pretty fast, building a refinery may take one to two years, building the roads. So I think we would have it in three years if we agree to it.”

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The two nations are in talks about electricity supplies, Tutlam said. Ethiopia, which is constructing a 5,150 megawatt dam that will create a surplus for the region, is already supplying Tanzania and Djibouti and recently agreed to export 400 megawatts to Kenya.

To contact the reporter on this story: Okech Francis in Juba at fokech@bloomberg.net

To contact the editors responsible for this story: David Malingha at dmalingha@bloomberg.net, Helen Nyambura, Hilton Shone

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