GCL, China Jurong Sign Contract for Ethiopia’s Second-Phase LNG Project

October 22, 2026 | By Semahegn Nigatu

GCL Group and China Jurong Group have signed an agreement covering the construction and toll processing of liquefied natural gas (LNG) in Ethiopia, a step towards expanding production capacity at the country’s Ogaden Basin gas project.

The agreement was signed by GCL Energy Investment Co., Ltd.’s Ethiopia branch and Jurong Group (Holdings) Co., Ltd. at a ceremony attended by Mines Minister Alemtsehay Paulos, according to a statement from GCL.

The contract, titled the “LNG Contracted Construction and Toll Processing Contract”, is intended to support the second phase of LNG development, with construction of its first module expected to be advanced following the signing.

Wang Dong, executive president of GCL Group and president of GCL Africa Industrial Group, said the agreement would accelerate LNG engineering works based on the Calub gas field. He described the project as part of GCL’s efforts to increase LNG production capacity and expand domestic markets and export channels.

GCL said its Ogaden Basin natural gas project had already achieved commercial-scale domestic gas production and established Ethiopia’s first skid-mounted LNG liquefaction unit. The company did not disclose the planned capacity, investment value or construction timetable for the new phase.

Alemtsehay welcomed Jurong’s participation in the project and called for construction of the first module of the second phase to begin promptly, with the aim of bringing it into operation as early as possible. She said the Ministry of Mines would continue to provide policy support and facilitate investment in the country’s oil, gas and mineral sectors.

Jurong chairman Lin Rongsheng said his company would contribute expertise in natural gas liquefaction, project management, storage, transportation and international trade. He said the two companies would also work on supporting infrastructure and logistics systems to facilitate the development of Ethiopia’s natural gas industry.

The agreement brings together GCL’s existing involvement in Ethiopian gas exploration and development with Jurong’s capabilities in LNG infrastructure and commercial operations. However, the companies have yet to disclose the project’s financing arrangements, expected output or intended balance between domestic supply and exports.

The Ogaden Basin, in eastern Ethiopia, contains the country’s principal known natural gas resources. Developing the deposits into a commercially viable industry requires investment in processing facilities, transport infrastructure and markets capable of absorbing the output.

GCL said the project would follow applicable laws and regulations, create local employment and support the development of an integrated natural gas value chain covering extraction, liquefaction, storage, transportation and end-use applications.

Source: FSX Business News