Africa's richest man, Ethiopia and Djibouti to build $660m fuel pipeline

Nigerian billionaire Aliko Dangote, along with Ethiopia and Djibouti, have agreed to develop a $660 million petroleum pipeline and storage project. The initiative will comprise a 120km pipeline linking Djibouti's Damerjog port to a distribution facility in Dewele, Ethiopia, as well as a storage capacity of approximately 400 million litres.

The project is anticipated to commence operations within 18 months. Ethiopian Prime Minister Abiy Ahmed revealed that the pipeline would cut the transit time for fuel from Djibouti's port to the Ethiopian capital, Addis Ababa, from five days to just one. The initial phase will transport vital petroleum products, such as jet fuel, diesel, and petrol.

At the groundbreaking ceremony, Dangote emphasized that the project would enhance Ethiopia's energy security and bolster its fuel supply chain resilience. Landlocked Ethiopia heavily relies on Djibouti's port for imports, including petroleum products, and the new infrastructure is expected to alleviate the strain on existing transport systems that support industries like transport, aviation, agriculture, and construction.

Djibouti is also anticipated to reap benefits from heightened port activity, job generation, and increased government revenues. This project is part of Dangote's broader expansion of infrastructure and manufacturing ventures across Africa. Dangote Cement boasts a production capacity of around 55 million tonnes annually, while his oil refinery in Nigeria is currently capable of processing 700,000 barrels of crude per day and aims to double this to 1.4 million barrels daily.

The refinery has recently issued 4.1 billion ordinary shares on the Nigerian stock exchange, aiming to raise approximately $1.63 billion. In Kenya, Dangote is set to commence construction next week on a proposed 700,000-barrel-a-day crude oil refinery in Lamu.