President Salva Kiir’s visit to Nairobi comes at a potentially important moment for South Sudan’s oil industry, with talks with President William Ruto expected to include the recently launched Dangote-backed refinery project in Lamu and the role South Sudan could play in supplying crude to the planned facility.
The discussions could open a new chapter in South Sudan-Kenya economic relations by linking one of Africa’s most oil-dependent economies to a major refining and petroleum distribution hub on Kenya’s coast.
The Lamu refinery, backed by Nigerian businessman Aliko Dangote, is planned to process up to 700,000 barrels of crude oil per day, making it one of the largest proposed refining projects in Africa. The $16 billion project is expected to serve markets across East and Central Africa, including Kenya, Uganda, South Sudan, Tanzania, Rwanda, Burundi and eastern Democratic Republic of Congo.
For South Sudan, the attraction is straightforward: the country has crude oil but lacks sufficient refining capacity and remains heavily dependent on export infrastructure running through Sudan.
South Sudan has an estimated 3.5 billion barrels of proven crude oil reserves, according to the World Bank, making it one of the countries with the largest oil reserves in sub-Saharan Africa. In June, the country’s Petroleum Ministry reported production of about 174,000 barrels per day from six operational blocks.
Yet this resource wealth has not translated into economic stability. The World Bank says South Sudan’s economy remains extremely vulnerable because of its dependence on oil, disruptions to export infrastructure and weak public financial management.
This is where Lamu could become strategically important.
South Sudan currently relies heavily on pipelines through Sudan to move crude to international markets. The conflict in Sudan has repeatedly threatened that export route, exposing Juba to production disruptions, revenue losses and political risks beyond its control. The World Bank has identified disruptions to Sudan’s export infrastructure as one of the major vulnerabilities facing South Sudan’s economy.
A connection to Lamu would therefore give South Sudan another potential outlet for its crude.
The opportunity, however, would extend beyond simply selling oil to Kenya. South Sudan could potentially become an upstream supplier to the Lamu refinery while gaining access to refined petroleum products through the same regional corridor.
This could reduce the distance between South Sudan and East African petroleum markets, create demand for storage and transportation services, and stimulate investment along the Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) corridor. Kenya’s own petroleum development plans identify Lamu as a strategic component of a transport network linking Kenya with South Sudan and Ethiopia.
For Juba, importing refined products from Lamu could also be economically significant. Instead of exporting crude and then buying back refined petroleum products from distant international markets, South Sudan could participate in a regional value chain in which crude is processed closer to its principal markets.
The arrangement could generate additional opportunities in fuel storage, trucking, pipeline infrastructure, oil trading and petroleum distribution.
But significant infrastructure and commercial questions remain. South Sudan would need reliable transportation links from its oil-producing regions to the LAPSSET corridor, while Kenya and investors would need long-term guarantees on crude supply, security and commercial viability. The Lamu refinery itself is still at the development stage following its September 30 groundbreaking, with construction expected to take about 40 months.
President Ruto has already indicated that the refinery will not depend exclusively on Kenyan crude. Kenya plans to connect Turkana oilfields to Lamu through a crude pipeline, while discussions are also under way with neighbouring countries on supplying the refinery.
That creates a potential opening for South Sudan.If Nairobi and Juba can agree on a commercially viable crude supply framework, the Lamu refinery could become more than a Kenyan energy project. It could emerge as a regional petroleum hub linking South Sudan’s vast oil reserves with East Africa’s expanding consumer markets.
For Kiir, therefore, the Lamu discussions are not simply about another investment project. They could form part of a broader strategy to diversify South Sudan’s oil export options, strengthen economic ties with Kenya and reduce the country’s vulnerability to disruptions along the Sudan corridor.
With South Sudan preparing for elections on December 22, 2026, and seeking greater regional stability, an economic partnership built around oil, infrastructure and trade could give the Nairobi talks a significance extending well beyond the electoral agenda.
