Kenya and South Sudan have signed an agreement for the construction of an oil pipeline connecting the two countries.
The agreement, signed in Juba on Tuesday and witnessed by Prime Minister Raila Odinga and the President of South Sudan Mr Salva Kiir, will allow the development of an oil pipeline and fibre optic connections between the oil fields in South Sudan and the Kenyan port town of Lamu.
The pipeline will be developed through Kenyan territory and will be built and owned by South Sudan.
The two countries will negotiate and agree on transit fees for the oil pipeline.
Mr Odinga led a team of government officials to Juba for the signing of the agreement.
The Kenyan delegation included Foreign Affairs Minister Moses Wetangula, Energy Minister Kiraitu Murungi and Public Service Minister Dalmas Otieno. Mr Murungi signed on behalf of Kenya.
Mr Stephen Dhieu, the Minister for Petroleum and Mines, signed on behalf of the Government of South Sudan.
Mr Odinga flew back to Nairobi after witnessing the signing of the agreement and flew out the country for the World Economic Forum in Davos, Switzerland. He is due back in Nairobi over the weekend.
The signing of the agreement between Kenya and South Sudan comes amid deepening row over oil pipeline pitting the two Sudans.
Last week, South Sudan shut down its oil pipeline that runs through the Sudan to the export terminal along the Red Sea coast.
The closure followed South Sudan’s persistent oil row with Sudan.
The Council of Ministers in a sitting chaired by President Salva directed the Petroleum and Mining minister Stephen Dhieu Dau to execute the decision immediately, Information minister Barnaba Marial Benjamin said.
South Sudan accuses her northern neighbour of stealing its oil destined to potential buyers overseas and constructing a secret pipeline to divert her oil.
Over 75 per cent of the crude oil Sudan exported before its split in July last year came from fields in the south, but most of the infrastructure has been in the north.
South Sudan became Africa’s newest nation in July under a 2005 peace deal that ended decades of civil war between north and south, but many issues remain unresolved, including oil, debt and violence on both sides of the poorly-defined border.