On September 24, 2026, a groundbreaking ceremony was held in Damerjog, Djibouti, to mark the beginning of a new pipeline project connecting Djibouti to Ethiopia. The project, undertaken by Dangote Group and Ethiopian Investment Holdings, aims to transport refined petroleum products from Djibouti to Ethiopia. The pipeline will stretch approximately 120 kilometers to Dewele, in eastern Ethiopia. The project was attended by prominent figures, including Aliko Dangote, Ethiopian Prime Minister Abiy Ahmed, and Djiboutian President Ismaïl Omar Guelleh.
The pipeline project is estimated to cost $660 million, with the initial storage terminal investment valued at $160 million. The terminal will have a significant storage capacity of over 1.175 million cubic meters, with 375,000 cubic meters allocated to the Damerjog site and 800,000 cubic meters to Dewele. The project is expected to be completed within 18 months. The pipeline will not only facilitate the transportation of petroleum products but also create several hundred local jobs during development and operation.
The project is expected to transform the region's energy landscape and supply chain. Currently, Ethiopia relies heavily on road transportation for fuel imports from Djibouti. The pipeline aims to reduce logistics costs and transportation times between the two countries. According to Prime Minister Abiy Ahmed, the pipeline will improve the efficiency of fuel distribution in Ethiopia. The project is also expected to enhance the security of fuel supplies and increase the capacity of the Djibouti-Ethiopia corridor to handle petroleum products.
The pipeline project is a strategic move for Ethiopia, which has been landlocked since Eritrea's independence in 1993. The country relies heavily on Djibouti for its maritime trade. The pipeline will add a critical energy infrastructure component to the existing road, rail, and port connections between the two countries. The project is expected to improve the overall efficiency of the corridor and increase its capacity to handle petroleum products.
For Aliko Dangote, the pipeline project represents an expansion of his investments in Ethiopia. His group is developing a $4 billion investment portfolio in the country, which includes fertilizer and energy installations, as well as a polypropylene packaging unit. The pipeline project adds a new dimension to Dangote's industrial projects in Ethiopia, further solidifying his presence in the country's economy.
The project is also expected to have a positive impact on Djibouti's economy. The terminal in Damerjog will occupy approximately 80 hectares and have the capacity to process up to 5 million tons of petroleum products annually. The site will be connected to the Damerjog-Nagad railway line and the liquid bulk port installations. The project is expected to create new economic opportunities for the region and contribute to its growth.
With the completion of the pipeline project, the region can expect improved fuel distribution, reduced logistics costs, and increased economic opportunities. The project's success will depend on its timely completion, with a planned 18-month timeline. If successful, the project will set a precedent for future energy infrastructure development in the region.
Key points
- The pipeline project aims to reduce logistics costs and transportation times between Djibouti and Ethiopia.
- The project is expected to create several hundred local jobs during development and operation.
- The pipeline will add a critical energy infrastructure component to the existing road, rail, and port connections between Djibouti and Ethiopia.
