Ethiopia and Djibouti Start Work on $660m Fuel Pipeline Project

Ethiopia and Djibouti have started work on a 660 million US dollar petroleum infrastructure project designed to connect Djibouti’s maritime fuel facilities with storage and distribution infrastructure in Ethiopia.

Prime Minister Abiy Ahmed, Djibouti President Ismail Omar Guelleh and Dangote Group President Aliko Dangote laid the foundation stone for the project, which is expected to establish an integrated system for receiving, storing and transporting petroleum products between the two countries.

The development is being pursued by Ethiopian Investment Holdings (EIH), Dangote Industries Limited and Great Horn Investment Holding, which signed a memorandum of understanding to advance the project.

The planned infrastructure will include petroleum storage facilities and pipelines linking facilities in Djibouti with Ethiopia. The partners said the system is intended to reduce reliance on road transport for moving fuel, lower logistics costs and improve the reliability of petroleum supplies.

The project is expected to be completed in less than two years, according to the announcement. The parties did not disclose the planned pipeline capacity, the locations of the storage facilities or the financing structure.

The project would introduce additional pipeline infrastructure into the movement of imported petroleum products from the port into the country, which depends heavily on Djibouti for access to international markets.

EIH chief executive Brook Taye (PhD) said the project would address infrastructure constraints in Ethiopia’s petroleum supply chain and strengthen the connection between Ethiopia and Djibouti.

The investment also extends the partnership between EIH and Dangote Group. The two entities are involved in a planned 2.5 billion US dollar urea fertiliser complex in Gode, in Ethiopia’s Somali region, with a targeted annual production capacity of three million tonnes.

Source: FSX Business News