Nigerian billionaire Aliko Dangote, Ethiopia and Djibouti have agreed to develop a $660m (£500m) petroleum pipeline and storage project linking the two countries.
The project will include a 120km- (75 mile-) pipeline connecting Djibouti’s Damerjog port to a distribution facility in Dewele, Ethiopia, as well as storage capacity of about 400 million litres.
It is expected to begin operations within 18 months.
Ethiopian Prime Minister Abiy Ahmed said the pipeline would reduce the time needed to transport fuel from Djibouti’s port to the Ethiopian capital, Addis Ababa, from five days to one.
The first phase will transport key petroleum products, including jet fuel, diesel and petrol.
Speaking at the groundbreaking ceremony, Dangote said the project would strengthen Ethiopia’s energy security and make its fuel supply chain more resilient.
Landlocked Ethiopia relies heavily on Djibouti’s port for imports, including petroleum products. The new infrastructure is expected to reduce pressure on existing transport systems supporting industries, including transport, aviation, agriculture and construction.
Djibouti is also expected to benefit from increased port activity, job creation and higher government revenues.
The project is part of Dangote’s wider expansion of infrastructure and manufacturing businesses across Africa.
Dangote Cement has production capacity of about 55 million tonnes a year, while his oil refinery in Nigeria currently has capacity to process 700,000 barrels of crude a day and is seeking to double that to 1.4 million barrels a day.
The refinery recently listed 4.1 billion ordinary shares on the Nigerian stock exchange, aiming to raise about $1.63bn (£1.2bn).
In Kenya, the company is due to break ground next week on a proposed 700,000-barrel-a-day crude oil refinery in Lamu.
