AFP reported that South Sudan signed an agreement with Kenya to build an oil pipeline to a Kenyan port, potentially freeing it from reliance on its northern neighbor Sudan.

Mr Elizabeth James Bol South Sudan's deputy minister of petroleum and mining said that a MoU was signed by Kenya and South Sudan for the construction of the new pipeline.

An official Kenyan said that the agreement, inked in Juba late Tuesday, will allow the development of an oil pipeline and fibre optic connections between the oil fields in South Sudan and the Kenyan port town of Lamu.

A pipeline would free land locked South Sudan on its dependence of exporting oil through its northern neighbor and former civil war enemy Sudan which it split from last July after decades of bloody conflict. However, the oil rich but grossly underdeveloped world's newest state lacks the infrastructure to refine and export oil.

Crucial facilities including a pipeline and Red Sea export terminal remain in Sudan, leaving the two states arguing bitterly over how much the South should pay to use the infrastructure. The agreement Tuesday was witnessed by South Sudanese President Mr Salva Kiir and Kenya's Prime Minister Mr Raila Odinga.

Mr Odinga's office said that "The pipeline will be developed through Kenyan territory and will be built and owned by South Sudan. The two countries will negotiate and agree on transit fees for the oil pipeline."

(Sourced from AFP)