(Video) Kenya, Ethiopia plan oil products pipeline

By Edmund Blair | Reuters

NAIROBI, June 23 (Reuters) - Kenya and Ethiopia aim to finalise plans by the end of 2016 for a refined oil products pipeline to be built from Kenya's north coast to the Ethiopian capital, the two said on Thursday.

Kenya has been seeking to develop a new port on its north coast at Lamu, part of a plan to build an economic corridor with transport and other links to Ethiopia, South Sudan and Uganda. But the projects, drawn up years ago, have been slow.

This year, the Lamu project suffered a setback when Uganda picked a route through Tanzania to export oil it aims to produce from new discoveries, instead of linking up with fields in Kenya and piping oil to Lamu. Kenya says it will now proceed alone.

Kenyan President Uhuru Kenyatta discussed expanding economic ties during talks with Ethiopia's Prime Minister Hailemariam Desalegn during his visit to Nairobi.

In a joint communique, the two leaders "committed to finalise an agreement on the development and operation of a product oil pipeline from Lamu Port to Addis Ababa by the end of 2016." It did not give further details.

Ethiopia, with a bigger population but smaller economy than Kenya, is land-locked but has been building a new railway, highway and other links to Djibouti and the international port there as part of its plans to develop new industries.

Ethiopia has one of Africa's fastest expanding economies, outpacing Kenya's growth rate of about 6 percent a year.

Among other agreements outlined in the communique, the two nations agreed to establish a Joint Railway Commission, without giving details.