Ethiopia and Djibouti pipeline construction deal worth U.S.$2b has been signed a move that is expected to boost oil transportation between the two countries.
The contractors assigned for the mega project; Black Rhino Group and Mining Oil & Gas Services (MOGS) are supposed to raise at least US$ 1bn to finance the construction.
The 550 km pipeline is expected to transport petrol, diesel and jet fuel from Damerjog port in Djibouti to Awash terminal in central Ethiopia.
Ethiopia and Djibouti pipeline construction deal which is anticipated to increase energy security, aid economic development and reduce harmful emissions is scheduled for completion in 2018. It is also expected to increase the efficiency and safety of Ethiopia’s supply chain by reducing transport costs, while increasing the scale of oil products imports and also reinforce Djibouti’s position as a regional shipping hub by expanding the capacity of its port.
“The pipeline will increase energy security, aid economic development and reduce harmful emissions and will be complete by 2018,” said Brian Herlihy, Chief Executive Officer of Black Rhino, which is owned by funds managed by Blackstone Group LP.
Currently, oil products are usually transported over 800 kilometers from Djibouti port by road to Addis Ababa through mountainous terrain. Djibouti is investing heavily in sea-ports and other infrastructure projects with the aim of becoming a commercial logistics hub for East Africa.
Black Rhino is a Blackstone Portfolio Company focused on the development and acquisitions of energy and infrastructure projects across Africa.
Mining, Oil and Gas Services (MOGS), is a South African based black owned BEE accredited company that focuses on providing various products and services to the mining, oil and gas services industry in South Africa, and neighbouring countries.
