UPDATE 1-S.Sudan, Kenya agree to build oil pipeline

KHARTOUM, Jan 25 (Reuters) - South Sudan has signed an agreement with Kenya to build a pipeline to connect its oil fields with the Kenyan port of Lamu, both governments said. "The pipeline will be developed through Kenyan territory and will be built and owned by South Sudan," the Kenyan government said in a statement late on Tuesday, without giving a timeframe. South Sudan's deputy petroleum and mining minister Elizabeth James Bol told Reuters it would take around 11 months to build the pipeline. "They will start as soon as possible," she said, adding that the company which has won the contract will be announced this week. Landlocked South Sudan has been seeking to build a pipeline to Kenya to end dependency on Sudan through which Juba now needs to exports its crude via a pipeline to the Sudanese port of Port Sudan. South Sudan and Sudan are locked in a row over how to disentangle their oil industries. Juba said on Monday it had started shutting down its oil production after Khartoum said it had begun seizing southern oil as compensation for what it called unpaid transit fees. Officials said in November that South Sudan was producing about 350,000 barrels of oil per day. No recent update has been given. China is the biggest buyer of oil from the two countries, some 12.99 million barrels last year. That amounted to five percent of last year's crude imports by China, which is also the top investor in South Sudan's oilfields. (Reporting by Nairobi newsroom, Ulf Laessing; editing by Jason Neely) Keywords: SOUTHSUDAN KENYA/ (ulf.laessing@thomsonreuters.com)(Khartoum newsroom)(+249 927 000 086)(Reuters Messaging: ulf.laessing@reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2012. All rights reserved.

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