East African Oil Projects Need Infrastructure

Co-Founder and Director of Trinity Energy, Richard Raja, talks about the infrastructure needs in South Sudan specifically and East Africa in general. The growing oil and gas industry in the region will require additional investment in pipelines, refineries and other infrastructure.

A number of South Sudanese refinery projects have stalled since 2013, but Trinity’s project is now moving ahead. What are the details of the Trinity Energy refinery?

We have obtained a license to build an independently owned and run refinery with a capacity of 50,000 barrels per day. The feasibility study was completed in 2013 and we held a workshop for the project in Johannesburg that year. Although we were able to understand a lot of the requirements and start preparing our resources, the refinery did not move forward at that time, mostly due to the uncertainty and insecurity that arose from the 2013 conflict. Trinity Energy attracted an investment of $1.5 billion at that time and we are now trying to revive this project.

Work is now planned to commence in the last quarter of 2017. We have moved the location of the refinery to the oil-producing area of Paluch and our target is to have this refinery commissioned by 2020. We will only need to construct a small pipeline for the refinery’s feedstock, as we will be building the refinery close to the location of the wells and not far from the central processing unit. We are also considering a product pipeline to Ethiopia so we can market our output regionally. The East African markets import finished petroleum products to the tune of nearly $12 billion dollars annually and this market is growing at 8 percent year on year.

What is Trinity Energy’s plan for expansion into new parts of the hydrocarbons value chain?

The company would like to be involved in the complete value chain of the petroleum industry. We are not currently in the upstream, but it’s not part of our strategy to enter multiple segments simultaneously, so this will be a long term plan. Our investments will be taken one step at a time. The major project is to complete the refinery, and once that is running, we look forward to entering other segments of the value chain.

How will Trinity Energy bring its refined products to market? Would the company also consider investing in crude oil export infrastructure?

Oil export pipelines are something the government has to think about as this will be a strategic investment. As a commercial enterprise, our interest is to see that our projects are taken to the market, and outside South Sudan to markets in East Africa. We want to focus on a product pipeline to start with, starting at 50,000 barrels per day, which will be equivalent to around 2.4 million tonnes per annum. This will address about 30 percent of the East African market’s requirement for petroleum products. Our focus will then to be increase our production to 100,000 barrels per day, so that we can capture 50 percent of the downstream product market in East Africa.

Uganda and Kenya have also struck oil, and will be starting production very soon. Kenya is expected to begin producing 2,000 barrels per day this year and Uganda is targeting production by 2018 or 2019. Neither of these countries have an export pipeline yet. Without a pipeline, it does not make economic sense to transport crude by road. That is what Kenya will be doing initially, but 2,000 barrels is a very small quantity. To make economic sense, you need to have a pipeline. Kenya has an ambitious project to build an export pipeline, and they want to connect the South Sudanese oilfields through an integrated transport corridor to Lamu. Now that Uganda’s planned pipeline will run through Tanzania, Kenya can join with South Sudan to develop the needed infrastructure for crude oil exports.

This interview excerpt is part of the Africa Energy Series: South Sudan 2017 book, which will be released at Africa Oil & Power in Cape Town from June 5-7. The full interview with Co-Founder and Director of Trinity Energy, Richard Raja will be available in the Africa Energy Series publication.