Uganda and Tanzania signed an agreement on their proposed $3.55 billion crude export pipeline on Friday, a key milestone for the project which is expected to start pumping Ugandan oil to international markets in three years.
An official at Uganda's Ministry of Energy told Reuters the agreement covered terms on tax incentives for the project, implementation timelines, the size of the pipeline and local content levels.
The 1,445 km pipeline will start in landlocked Uganda's western region, where crude reserves were discovered in 2006, and terminate at Tanzania's Indian Ocean seaport of Tanga.
Uganda estimates overall crude reserves at 6.5 billion barrels, while recoverable reserves are seen at between 1.4 billion and 1.7 billion barrels.
(Reporting by Elias Biryabarema; editing by Duncan Miriri and David Clarke) Reuters