Nigerian billionaire Aliko Dangote, along with the governments of Ethiopia and Djibouti, have agreed to develop a $660 million petroleum pipeline and storage project. The initiative aims to link the two nations, with operations expected to commence within 18 months.
The infrastructure will feature a 120-kilometer pipeline extending from Djibouti’s Damerjog port to a distribution hub in Dewele, Ethiopia. It will also include storage facilities capable of holding approximately 400 million liters of fuel. The first phase of the project will facilitate the transport of essential petroleum products, including jet fuel, diesel, and petrol.
Ethiopian Prime Minister Abiy Ahmed stated that the new pipeline will significantly streamline logistics, reducing the time required to move fuel from the port in Djibouti to the Ethiopian capital, Addis Ababa, from five days down to just one. As a landlocked country, Ethiopia depends heavily on Djibouti’s port for imports, including petroleum products.
Speaking at the groundbreaking ceremony, Dangote emphasized that the project would bolster Ethiopia’s energy security and enhance the resilience of its fuel supply chain. The new infrastructure is projected to alleviate pressure on existing transport networks that support critical sectors such as aviation, agriculture, construction, and general transport.
Djibouti is also anticipated to reap benefits from the development, including heightened port activity, increased job creation, and greater government revenue. This venture aligns with Dangote’s broader strategy to expand his infrastructure and manufacturing enterprises across the African continent.
Dangote’s current industrial footprint includes Dangote Cement, which boasts an annual production capacity of roughly 55 million tonnes, and a Nigerian oil refinery with a daily processing capacity of 700,000 barrels of crude. The company is currently pursuing a plan to double that refining capacity to 1.4 million barrels per day. Additionally, the refinery recently listed 4.1 billion ordinary shares on the Nigerian stock exchange to raise approximately $1.63 billion.
Furthering his regional ambitions, Dangote is scheduled to break ground next week in Kenya for a proposed refinery in Lamu, designed to process 700,000 barrels of crude oil daily.
Dangote is expanding fast. With the Kenya refinery next, his African footprint is becoming impossible to ignore.
Finally, infrastructure that directly benefits the region instead of just relying on road transport for essential fuel.
Is $660 million realistic for this scope? I hope the timeline is accurate, as previous projects have faced delays.
That transit time drop from five days to one is a game-changer for Ethiopia’s economy and supply chain resilience.