Ethiopia and Djibouti to Build $660 Million Fuel Pipeline with Nigerian Billionaire

Nigerian billionaire Aliko Dangote, along with the governments of Ethiopia and Djibouti, have agreed to jointly develop a $660 million petroleum pipeline and storage project connecting the two East African nations. The initiative is designed to improve Ethiopia's energy security and create jobs in Djibouti.

The project will feature a 120-kilometer pipeline stretching from Djibouti's Damerjog port to a distribution facility in Dewele, Ethiopia. It will also include storage capacity for approximately 400 million liters of petroleum products. Operations are anticipated to commence within 18 months.

Ethiopian Prime Minister Abiy Ahmed stated that the pipeline will significantly reduce the transit time for fuel from Djibouti's port to the Ethiopian capital, Addis Ababa, shortening the journey from five days to just one. The initial phase will concentrate on transporting key products such as jet fuel, diesel, and petrol.

Dangote remarked at the groundbreaking ceremony that the infrastructure would bolster Ethiopia's energy security and enhance the resilience of its fuel supply chain. Ethiopia, a landlocked country, relies heavily on Djibouti's port for its imports, including crucial petroleum products. The new pipeline is expected to alleviate pressure on existing transportation networks that support vital industries including transport, aviation, agriculture, and construction.

Djibouti is also poised to benefit from this development through increased port activity, the creation of new employment opportunities, and enhanced government revenues.

This venture is part of Dangote's broader strategy to expand his infrastructure and manufacturing businesses across the African continent. Dangote's business interests include Dangote Cement, which has a production capacity of around 55 million tonnes annually, and an oil refinery in Nigeria capable of processing 700,000 barrels of crude oil per day, with plans to double this capacity. His refinery recently listed shares on the Nigerian stock exchange to raise approximately $1.63 billion.

Additionally, Dangote's company is set to break ground on a proposed 700,000-barrel-a-day crude oil refinery in Lamu, Kenya, next week.