Ethiopia and Djibouti Plan $660 Million Petroleum Pipeline

Ethiopia and Djibouti are planning a $660 million pipeline to transport refined petroleum products between Damerjog port and a distribution facility in Dewele.

Ethiopian Investment Holdings announced the agreement on Thursday. Aliko Dangote said he is helping to fund the project, although the full financing structure and the precise size of his contribution have not been disclosed.

Pipeline to link port and distribution facility

The planned connection will extend for 120 kilometres. It is expected to include storage facilities at both ends, allowing petroleum products to be received at Damerjog and handled at the distribution facility in Dewele.

The pipeline is expected to begin operations within 18 months. No firm construction or commissioning date has been provided, and the project’s planned capacity has not been specified.

Ethiopia is landlocked and relies heavily on Djibouti’s port for imports, including petroleum products. The planned infrastructure is therefore intended to support the movement of fuel along the corridor between the two countries.

Expected economic and energy benefits

Ethiopian Prime Minister Abiy Ahmed said the project “will reduce logistics costs and delays” and strengthen energy security along the corridor.

The announcement comes as Dangote Group expands its infrastructure and manufacturing activities across Africa. In Ethiopia, the group is building a $4 billion fertiliser pipeline and power plant, as well as a polypropylene packaging facility.

Dangote is also due to break ground the following week on a 700,000-barrel-per-day oil refinery in Lamu, Kenya. The planned refinery is separate from the Ethiopia-Djibouti pipeline project.

The pipeline announcement establishes the expected route, cost and operating timeframe, but does not provide details on construction arrangements or a final completion schedule.