Dangote Helps Fund $660m Ethiopia-Djibouti Fuel Pipeline
Nigerian billionaire Aliko Dangote is helping fund a $660 million fuel pipeline connecting Ethiopia and Djibouti, in a project designed to improve the movement and storage of petroleum products between the two countries.
The 120km pipeline will connect Djibouti’s Damerjog port with a fuel distribution facility in Dewele, Ethiopia. The project will also include storage capacity of about 400 million litres and is expected to begin operations within 18 months.
The Ethiopia-Djibouti fuel pipeline is expected to shorten the time needed to transport fuel from Djibouti port to Addis Ababa from about five days to one, according to Ethiopian Prime Minister Abiy Ahmed.
The first phase of the project will handle major petroleum products, including petrol, diesel and jet fuel. Ethiopia is landlocked and relies heavily on Djibouti’s port for imports, including fuel.
Dangote said at the groundbreaking ceremony that the project would strengthen Ethiopia’s energy security and make its fuel supply chain more resilient.
The new infrastructure is also expected to reduce pressure on existing transport networks used by industries such as aviation, agriculture, construction and road transport.
The Ethiopia-Djibouti fuel pipeline is planned as a joint venture between Dangote and Ethiopia. For Djibouti, the project is expected to bring greater port activity, create jobs and increase government revenues.
For Ethiopia, faster fuel transportation could change how petroleum products move from the port to the country’s main markets. The planned storage facilities will also provide additional capacity for handling imported fuel.
The project forms part of Dangote’s wider expansion across Africa. His business interests include cement manufacturing and oil infrastructure.
Dangote Cement has production capacity of about 55 million tonnes a year, while the Dangote refinery in Nigeria can currently process 700,000 barrels of crude per day and is seeking to double that capacity.
Construction of the Ethiopia-Djibouti fuel pipeline will move ahead following the groundbreaking ceremony, with operations expected within 18 months.
Dangote is also expanding his energy investments elsewhere in Africa. In Kenya, the company is expected to break ground on a proposed 700,000-barrel-a-day crude oil refinery in Lamu.
Meanwhile, the Dangote refinery in Nigeria has recently listed 4.1 billion ordinary shares on the Nigerian stock exchange as it seeks to raise about $1.63 billion.
The Ethiopia-Djibouti project adds another major infrastructure development to the group’s growing presence in Africa’s energy and manufacturing sectors.
