The United Arab Emirates plans to build an oil pipeline connecting Eritrea and Ethiopia, an Ethiopian official said.
The pipeline will run from Eritrea's port city of Assab to Ethiopia's capital Addis Ababa, the official said.
Landlocked Ethiopia began extracting crude oil on a test basis from reserves in the country's southeast in June and will need access through Eritrea in order to export it.
Ethiopian broadcaster Fana first reported the pipeline plan earlier on Friday following a meeting in Addis Ababa between Ethiopia Prime Minister Abiy Ahmed and Reem Al Hashimy, the UAE's minister of state for international cooperation.
Al Hashimy, who last month publicly referred to herself as the UAE's policy lead on sub-Saharan Africa, said after meeting Abiy that the UAE is keen to exploit investment opportunities in Ethiopia, a country of 100 million people with the fastest growing economy in Africa, Fana reported.
Abiy's chief of staff, Fitsum Arega, told Reuters that the talks were largely on investment in "industries, agriculture, real estate, [the] oil pipeline, [and] resorts".
Abu Dhabi has a military base in Assab which it uses in its military campaign in the war in Yemen, located just across the Red Sea.
Saudi Arabia's Foreign Minister Adel Al-Jubeir arrived in Addis Ababa yesterday and met with Abiy, although there were no detailed announcements from the meeting.