A new $660 million pipeline project linking Djibouti's Damerjog port with Dewele in eastern Ethiopia aims to revolutionize fuel transportation in one of Africa's largest landlocked economies. The project, backed by Ethiopian Investment Holdings and the Dangote Group, signifies a major milestone in regional cooperation and infrastructure development. The 120km pipeline will include storage terminals of approximately 375,000 cubic meters at Damerjog and 800,000 cubic meters at Dewele, with a combined capacity of 1.18 million cubic meters. The project is expected to be operational within 18 months.
The partnership involves Ethiopian Investment Holdings, Dangote Industries, and Djibouti's Great Horn Investment Holding. Ethiopia, a landlocked nation with a population of around 130 million people, relies heavily on Djibouti's ports for its trade. In the 2025/26 fiscal year, Djibouti handled 96.71% of Ethiopia's import and export cargo, totaling 17.57 million metric tons. Fuel imports alone accounted for 4.23 million tons of that volume. This concentration creates both strategic importance and vulnerability, as disruptions along the Red Sea and Bab el-Mandeb directly threaten Ethiopia's fuel supply.
The current supply chain requires petroleum products to travel approximately 750km by road from Djibouti to Addis Ababa, with each liter of fuel enduring a five-day journey on a truck. More than 1,000 fuel tankers travel the Djibouti-Ethiopia corridor each day, with petroleum products accounting for around 35% of truck movements. This creates congestion, high logistics costs, and exposure to delays from border procedures, vehicle shortages, and road disruptions. Prime Minister Abiy Ahmed emphasized that the project will reduce transit time from five days to approximately one day.
Ethiopian Investment Holdings CEO Brook Taye stated that the pipeline will replace a substantial share of fuel volumes currently transported by tanker trucks, reducing delays and demurrage costs. Storage terminals at both ends will allow vessels to unload immediately, eliminating port congestion that occurs when tanker capacity or storage is unavailable. Ethiopia spends approximately $4.2 billion annually on fuel imports, straining foreign currency reserves. The country consumed about 3.93 million metric tons of fuel in 2023-24, with aviation fuel accounting for nearly a quarter.
The pipeline is designed to strengthen resilience against supply shocks by providing dedicated storage and transport infrastructure. In March 2026, fuel shortages linked to Strait of Hormuz disruptions forced the government to urge citizens to conserve fuel and release national stockpiles. The project brings together Ethiopian state investment, Nigerian industrial capital, and Djiboutian logistics infrastructure. Abiy described it as "African investment at its center," emphasizing regional ownership. Financing is supported by the African Export-Import Bank.
The 18-month operational target is described as ambitious for a project involving pipeline construction, terminals, cross-border coordination, and safety systems. Delays can arise from land access, procurement, engineering, financing, or regulatory approvals. The project should be measured through published milestones, not ceremony dates. The final economic impact will depend on actual operating costs, pipeline capacity, fees, maintenance, and distribution efficiency after fuel reaches Dewele.
Aliko Dangote described the Damerjog-Dewele project as the first piece of an East African supply chain that will grow into nearly 4,000 kilometers of pipelines feeding landlocked markets. The project connects to the Damerjog Liquid Bulk Port, which has an oil jetty designed to handle up to 25 million tonnes annually, and the Damerjog-Nagad railway corridor. This integration with existing infrastructure reflects a systems approach to logistics rather than a standalone pipeline.
Key points
- The $660 million pipeline project aims to reduce fuel transportation costs and increase efficiency in the region.
- The project is expected to be operational within 18 months and will have a significant impact on Ethiopia's fuel supply.
- The pipeline will connect Djibouti's Damerjog port with Dewele in eastern Ethiopia, reducing transit time and increasing storage capacity.
