Nigerian billionaire Aliko Dangote, Ethiopia and Djibouti have agreed to develop a $660 million fuel pipeline and storage project linking the two East African countries, according to BBC reporting.
The project will include a 120-kilometre pipeline connecting Djibouti’s Damerjog port with a distribution facility in Dewele, Ethiopia.
It will also include storage facilities with capacity for about 400 million litres of fuel.
The project is expected to begin operations within 18 months.
Ethiopia-Djibouti fuel pipeline targets faster deliveries
The project aims to significantly reduce the time needed to move fuel into landlocked Ethiopia.
Ethiopian Prime Minister Abiy Ahmed said the pipeline could cut fuel transport time from Djibouti’s port to Addis Ababa from around five days to one.
During its first phase, the pipeline is expected to transport diesel, petrol and jet fuel.
Ethiopia relies heavily on neighbouring Djibouti’s ports for imported goods, including petroleum products.
Dangote targets Ethiopia’s fuel supply chain
Speaking at the project’s groundbreaking ceremony, Dangote said the infrastructure would strengthen Ethiopia’s energy security.
He also said it would make the country’s fuel supply chain more resilient.
The pipeline is expected to reduce pressure on existing transport systems that support industries including aviation, agriculture, construction and road transport.
Meanwhile, Djibouti is expected to benefit from increased port activity, job creation and additional government revenue, according to the BBC report.
Dangote expands across Africa
The project forms part of Dangote’s wider expansion of infrastructure and manufacturing businesses across Africa.
Dangote Cement has production capacity of about 55 million tonnes per year, according to figures cited by the BBC.
Meanwhile, Dangote’s Nigerian oil refinery currently has capacity to process around 700,000 barrels of crude oil per day.
The company is seeking to eventually double that figure to 1.4 million barrels per day.
The refinery recently listed 4.1 billion ordinary shares on Nigeria’s stock exchange, aiming to raise about $1.63 billion, the BBC reported.
Dangote is also expanding in East Africa.
In Kenya, the company is expected to break ground on a proposed 700,000-barrel-per-day crude oil refinery in Lamu.
The Ethiopia-Djibouti pipeline adds another major infrastructure project to the group’s growing African portfolio.