Ethiopia and Djibouti to Construct $660 Million Fuel Pipeline

Nigerian billionaire Aliko Dangote, along with Ethiopia and Djibouti, has agreed to develop a $660 million petroleum pipeline and storage project linking the two countries. The project will feature a 120-kilometer (75-mile) pipeline connecting Djibouti's Damerjog port to a distribution facility in Dewele, Ethiopia, with a storage capacity of approximately 400 million liters. Operations are expected to commence within 18 months. Ethiopian Prime Minister Abiy Ahmed stated that the pipeline will reduce the transportation time for fuel from Djibouti's port to the Ethiopian capital, Addis Ababa, from five days to one. The initial phase will transport essential petroleum products, including jet fuel, diesel, and petrol. At the groundbreaking ceremony, Dangote noted that the project would enhance Ethiopia's energy security and improve the resilience of its fuel supply chain. Ethiopia, being landlocked, relies significantly on Djibouti's port for imports, including petroleum products. The new infrastructure is anticipated to alleviate pressure on existing transport systems that support various industries, including transport, aviation, agriculture, and construction. Djibouti is also expected to gain from increased port activity, job creation, and higher government revenues. This project is part of Dangote's broader expansion of infrastructure and manufacturing businesses across Africa. Dangote Cement has a production capacity of about 55 million tonnes per year, while his oil refinery in Nigeria currently processes 700,000 barrels of crude oil daily, with plans to double that capacity to 1.4 million barrels per day. The refinery recently listed 4.1 billion ordinary shares on the Nigerian stock exchange, aiming to raise approximately $1.63 billion. In Kenya, the company is set to break ground next week on a proposed 700,000-barrel-a-day crude oil refinery in Lamu.