Kenya and Uganda have agreed on the route of a planned pipeline that would carry crude from Ugandan oilfields to the Kenyan coast.
The pipeline, when built, will run for about 1,500 kilometers from Uganda's Hoima district through the Lokichar basin in northern Kenya and to the Kenyan coastal town of Lamu.
The East African neighbors had also considered building the pipeline through southern Kenya. Proponents of that route said the northern route is more vulnerable to attacks by the Somali militant group Al-Shabab.
The decision was announced Monday, after talks between Ugandan President Yoweri Museveni and Kenyan President Uhuru Kenyatta in the Ugandan capital.
British-based Tullow Oil has found oil in both countries. Uganda's reserves are estimated at 6.5 billion barrels, while Kenya is believed to have at least 600 million barrels.
The project still depends on financing and security guarantees from Kenya.