The $3.5bn (£2.7m) project will connect Uganda’s oil fields to Tanzania’s port of Tanga.
The signing ceremony was attended by the presidents of both countries.
Oil reserves were found in Uganda in 2006 but production has been delayed partly by a 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 there are warnings the project could come at a huge cost to some Ugandan communities.
More than 12,000 families risk losing their land and livelihoods, according to a joint report by the International Federation for Human Rights (FIDH) and Oxfam.
Conservationists have also warned that ecosystems are at risk from the drilling in Uganda’s nature reserves.

“This is a very crucial project for our people,” said Tanzanian President John Magufuli, who signed the agreement paving the way for the pipeline in his hometown of Chato alongside his Ugandan counterpart Yoweri Museveni.

“Our signing today is a crucial step towards implementing the project which will not only create jobs, but also promote cooperation within the region, and stimulate economic development in areas the pipeline crosses.”

Work is scheduled to start by the end of the year on the East African Crude Oil Pipeline to exploit oil discovered near Lake Albert discovered in 2006. Reserves in the area are conservatively estimated at some 1.7 billion barrels.

“We want our people to work fast and start this project,” said Museveni at the signing ceremony.

After years of talks discussing the relative merits of different routes out to the Indian Ocean, Uganda announced in 2016 it would run the pipeline through Tanzania, not Kenya.

The enormous pipeline will run south of Lake Victoria to the port of Tanga near the Kenyan border.

French oil giant Total is leading the plans along with China’s CNOOC, and the governments of Uganda and Tanzania.
Sunday’s ceremony comes days after Total, the majority shareholder in Uganda’s oil fields, said it had reached an agreement on the pipeline with Uganda’s government.
About 80% of the pipeline will run through Tanzania and the project is expected to create more than 18,000 jobs for Tanzanians, Reuters news agency quotes government spokesman Hassan Abassi as saying.

 

Source : BBC & Other News Agencies

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