Kenya and South Sudan have signed an agreement that will allow for the building of an oil pipeline connecting the two countries.
The agreement signed in Juba on Wednesday and witnessed by Prime Minister Raila Odinga and South Sudan President Salva Kiir, will allow for a 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 pipeline.
Mr Odinga led a team of government officials to Juba for the signing of the agreement.
The Kenyan delegation included Cabinet ministers Moses Wetang’ula (Foreign Affairs), Kiraitu Murungi (Energy) and Dalmas Otieno (Public Service).
The signing of the agreement comes amid deepening row over oil pipeline pitting Juba and Khartoum.
Last week, South Sudan shut down its oil pipeline that runs through its northern neighbour to the export terminal along the Red Sea coast due to a persistent oil row with Sudan.
The Council of Ministers in a sitting chaired by President Kiir directed the Petroleum and Mining minister Stephen Dhieu Dau to execute the decision immediately, Information minister Barnaba Marial Benjamin said.
South Sudan accuses the North of stealing its oil destined to potential buyers overseas and building a secret pipeline to divert her oil.
More than 75 per cent of infrastructure through which Sudan exported the crude before last July’s referendum in which the Southerners overwhelmingly voted to be independent is in the north.
Tensions escalated last week when Khartoum said it had started confiscating oil from landlocked South Sudan, which exports its crude through Sudan’s pipelines to a port on the Red Sea.
The Sudanese economy has been badly hit by the loss of two thirds of oil production to the South, and the country is under pressure to ease the hardships of people already exhausted by years of conflict, inflation and a US trade embargo.