Uganda and Tanzania have signed an agreement on a feasibility study for a gas pipeline linking Tanzania's vast but remote deepwater gas fields to Kampala, their two energy ministers said.
Tanzania is awaiting cabinet approval for a $42-billion liquefied natural gas (LNG) project to unlock the 57.5-trillion cubic feet natural gas deposit.
Its energy ministry in May agreed a deal with Equinor, Shell and Exxon Mobil for the development of an LNG export terminal after years of delays.
"Time is running, we are behind time, let us make it happen," Tanzania's deputy prime minister and energy minister Doto Biteko said during a signing ceremony in the capital city Dodoma late on Thursday.
Ugandan Energy Minister Ruth Nankabirwa appealed to financing institutions to offer cheap credit to fund the project.
"This gas will not be affordable if we use expensive money," Nankabirwa said, without giving a timeline for the construction.
Together with France's TotalEnergies and China's CNOOC, the two countries are also currently developing a 1,445-kilometre-long pipeline to help transport crude oil from Uganda's oilfields to international markets via a port on Tanzania's Indian Ocean coast.
Uganda's President Yoweri Museveni has said the country is keen to use the same crude oil pipeline corridor to transport cheap natural gas from Tanzania.