Ethiopian Prime Minister Abiy Ahmed and Djibouti officials have joined Nigerian billionaire Aliko Dangote to agree on a $660m petroleum pipeline and storage project. The project links Djibouti's Damerjog port to a distribution facility in Dewele, Ethiopia, via a 120km pipeline. The facility will have a storage capacity of about 400 million litres. The project aims to strengthen energy security in landlocked Ethiopia and create jobs at Djibouti's port.
The pipeline is expected to significantly reduce the time needed to transport fuel from Djibouti's port to Ethiopia's capital, Addis Ababa, from five days to one. The first phase will transport key petroleum products, including jet fuel, diesel, and petrol. This development will make Ethiopia's fuel supply chain more resilient and reduce pressure on existing transport systems supporting various industries.
Landlocked Ethiopia relies heavily on Djibouti's port for imports, including petroleum products. The new infrastructure is expected to increase port activity, create jobs, and generate higher government revenues for Djibouti. The project is part of Dangote's wider expansion of infrastructure and manufacturing businesses across Africa.
Aliko Dangote's businesses have a significant presence in Africa, with his cement production capacity at about 55 million tonnes a year. His oil refinery in Nigeria currently processes 700,000 barrels of crude a day and aims to double that to 1.4 million barrels a day. The refinery recently listed 4.1 billion ordinary shares on the Nigerian stock exchange to raise about $1.63bn.
Dangote's project is expected to begin operations within 18 months. The pipeline and storage facility will support industries such as transport, aviation, agriculture, and construction. Djibouti's port will benefit from increased activity, and the government is expected to gain higher revenues.
The project is a significant step in Ethiopia's efforts to improve its energy security. The agreement was announced at a groundbreaking ceremony, where Dangote highlighted the project's potential to strengthen Ethiopia's energy security and make its fuel supply chain more resilient.
Aliko Dangote's expansion plans continue with a proposed 700,000-barrel-a-day crude oil refinery in Lamu, Kenya, set to break ground soon. His business ventures have made him Africa's richest man, with a diverse portfolio of infrastructure and manufacturing businesses across the continent.
Key points
- The $660m pipeline project will link Djibouti's Damerjog port to a distribution facility in Dewele, Ethiopia.
- The project aims to reduce the time needed to transport fuel from Djibouti's port to Ethiopia's capital from five days to one.
- The pipeline and storage facility are expected to begin operations within 18 months.
