Ethiopia receives US$1.4bn petro pipeline project proposal

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The Ethiopian Government is going through proposal for the construction of US$1.4bn petroleum pipeline at Port of Djibouti. This was disclosed in the “Powering Africa: Ethiopia Meeting” held in Radisson Blu Hotel last month.

Officials from the Ethiopia’s Ministry of Water, Irrigation & Energy (MoWIE) have confirmed receipt of the proposal and said they would have a look at it before deciding to discuss it further with other stakeholders, such as the Ministry of Finance & Economic Development (MoFED), the Ministry of Foreign Affairs (MoFA), and Ministry of Transport (MoT).

The proposal for construction of the pipeline was made by Black Rhino Group and MOGS (Mining, Oil & Gas Services). MOGS is owned by Royal Bafokeng Holdings while Black Rhino is owned by Blackstone.

The companies are proposing to build 550Km of pipeline from the port of Djibouti to a storage facility in Awash to ferry oil directly. This means the oil transportation will be saved from the congested port and road from Djibouti.

Oil will then, from here, distributed through tracks to other areas, including Addis Abeba. The pipeline construction project will help since truck shortages have been causing oil shortages: it is also expected to reduce the cost of transportation of the oil.

Brian Herlihy, CEO and founder of Black Rhino, made a presentation of the proposal at the Powering Africa meeting held at the Raddison Blu Hotel in Addis Abeba.

According to Brian, the company will pursue studying the environmental and engineering condition of the construction once the government has allowed the project to go ahead.

East Africa is also investing in a regional pipeline that will serve Kenya, Uganda and South Sudan. IFC recently pledged US$600m for the pipeline construction project.