Aliko Dangote and Ethiopian Investment Holdings will promote a Ethiopia-Djibouti oil pipeline of refined petroleum products valued at US$660 million which will connect Ethiopia with Djibouti. The infrastructure will offer Ethiopia, which is landlocked, a new route for transporting fuel from the coast.
The project will unite Damerjog, in Djibouti, with Dewele, in Ethiopia and will feature storage terminals at both ends. The initiative aims to reduce logistics costs and delays that currently affect the trade corridor between the two countries.
The Ethiopia-Djibouti oil pipeline will be 120 kilometers long.
The new pipeline will have an approximate length of 120 kilometers and will be accompanied by significant storage capacity. The project includes approximately 375,000 cubic meters in Damerjog and 800,000 cubic meters in Dewele.
According to the information released about the initiative, the infrastructure should become operational within a period of 18 months.
Once operational, the system will provide Ethiopia with an additional route for transporting goods refined petroleum products from Djibouti. This is especially relevant due to the country’s geographical location and its reliance on land corridors to access maritime trade.
Ethiopian Investment Holdings and Grupo Dangote will develop the project
The project will be developed through a partnership between Ethiopian Investment Holdings, Ethiopia sovereign wealth fund, and Dangote Group, the conglomerate led by Nigerian businessman Aliko Dangote.
Ethiopian Prime Minister Abiy Ahmed noted that the infrastructure was designed to reduce logistical costs and delays, as well as strengthen energy security and resilience of the corridor connecting Ethiopia with Djibouti.
The initiative also includes storage facilities at both ends of the route, which will complement pipeline transport with the capacity to receive, store and manage large volumes of refined petroleum products.
Djibouti strengthens its role within the energy corridor
Damerjog will have a strategic function within the new infrastructure, Djibouti President Ismail Omar Guelleh indicated that the project will help strengthen his country’s role as a regional energy platform.
The connection to Dewele will expand the available infrastructure along one of Ethiopia main supply corridors. The aim is to improve transport efficiency and reduce delays associated with fuel movements.
The project also takes on a regional dimension, connecting a landlocked economy with facilities located directly on the coast of Djibouti via energy infrastructure.
Dangote expands its energy investments in Africa
He pipeline this adds to a broader portfolio of investments promoted by Grupo Dangote in Africa, the conglomerate already participates in projects in Ethiopia related to fertilizers and electricity generation valued at US$4 billion.
The company has also expanded its presence in the fuel sector from Nigeria, its refining complex produces gasoline, diesel, and aviation fuel destined for both the Nigerian and international markets.
With the Dewele-Damerjog corridor, the Dangote Group now incorporates infrastructure directly focused on the transport and storage of petroleum products. For Ethiopia, the project represents a new physical route to strengthen its fuel supply chain from the coast.
Source: Business Insider Africa
Photo: Shutterstock
