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Nigerian billionaire Aliko Dangote, Ethiopia and Djibouti have agreed to develop a $600 million petroleum pipeline and storage project linking the two countries, according to the BBC.
The project will include a 120-km pipeline connecting Djibouti’s Damerjog port with a distribution facility in Dewele, Ethiopia. It will also provide storage capacity of about 400 million litres.
Operations are expected to begin within 18 months.
Pipeline aims to cut fuel transport times
Ethiopian Prime Minister Abiy Ahmed said the pipeline would reduce the time needed to transport fuel from Djibouti’s port to Addis Ababa from five days to one.
The first phase will carry key petroleum products, including jet fuel, diesel and petrol.
Speaking at the groundbreaking ceremony, Dangote said the project would strengthen Ethiopia’s energy security and make its fuel supply chain more resilient.
Djibouti to benefit from increased port activity
Landlocked Ethiopia relies heavily on Djibouti’s port for imports, including petroleum products. The new infrastructure is expected to ease pressure on existing transport systems serving the transport, aviation, agriculture and construction sectors.
Djibouti is also expected to benefit from increased port activity, job creation and higher government revenues.
Dangote expands African business interests
The project is part of Dangote’s broader expansion of infrastructure and manufacturing businesses across Africa.
“Dangote Cement” has production capacity of about 55 million tonnes a year. His oil refinery in Nigeria currently has capacity to process 700,000 barrels of crude oil a day and is seeking to double that to 1.4 million barrels a day.
The refinery recently listed 4.1 billion ordinary shares on the Nigerian stock exchange, aiming to raise about $1.63 billion.
In Kenya, the company is due to begin construction next week on a proposed 700,000-barrel-a-day crude oil refinery in Lamu.
