Uganda and Tanzania have agreed to build a pipeline linking landlocked Ugandan oilfields to the Indian Ocean.
Tanzania's President John Magufuli said the project would create more than 15,000 jobs. Tanzania has been competing with Kenya to build the pipeline through its territory.
Some oil companies working in Uganda expressed security concerns about the Kenyan option, as Islamist militants are increasingly active in some parts of the country.
The Tanzanian pipeline option, stretching over 1,000km (620 miles), was also said to be cheaper.
