Tanzania and Uganda have signed an agreement for the construction of a 1,445 km (898 mi) crude oil pipeline.
The $ 3.5bn (£ 2.7m) project will connect Uganda’s oil fields to Tanzania’s Tanga port.
The signing ceremony was attended by the presidents of both countries.
Oil reserves were found in Uganda in 2006, but production has been partially delayed by lack of infrastructure, including an export pipeline.
A start date for construction has not yet been announced for what is set to become East Africa’s first major oil pipeline.
But it has been warned that the project may come at a great cost to some Ugandan communities.
Uganda Country Profile
Conservationists have also warned that drilling in Uganda’s nature reserves threatens the ecosystem.
The French oil giant Total is leading the plans with China’s CNOOC and the governments of Uganda and Tanzania.
Sunday’s ceremony comes after a majority stakeholder in Uganda’s oil fields said it had reached an agreement on the pipeline with the government of Uganda.
About 80% of the pipeline will run through Tanzania and the project is expected to create more than 18,000 jobs for Tanzania, Reuters news agency quoted government spokesman Hassan Abasi.
- Oil and gas industry