In a major development in Ethiopia-Djibouti energy infrastructure, the two countries, alongside Nigeria’s Dangote Group, announced the launch of a US$660 million refined petroleum products pipeline project on September 24, 2026. The proposed 120-kilometre pipeline will connect the Damerjog petroleum hub in Djibouti to Dewele in Ethiopia’s Somali Region. It will also be supported by storage facilities with a combined capacity exceeding one million cubic metres.
The project is being developed through a partnership between Ethiopian Investment Holdings (EIH) and Dangote Group. It is intended to reduce Ethiopia’s dependence on road-based fuel transportation. The project will also lower logistics costs and strengthen fuel security.
According to the Ethiopian government, the pipeline is expected to reduce the journey for fuel supplies to Addis Ababa from approximately five days by truck to around one day. Djibouti’s presidency also announced the launch of construction works for associated energy infrastructure at Damerjog.
However, this new refined petroleum products pipeline is separate from the previously proposed 767-kilometre natural gas export pipeline. The pipeline linked the Calub and Hilala gas fields to Djibouti, both of which continue be operational. Calub gas field is also at the center of a new contract signed with Chinese contractors to develop the second phase of Ogaden LNG project.
The latest announcement nevertheless highlights the continuing strategic importance of the Ethiopia–Djibouti corridor in expanding regional energy transportation and storage capacity.
Ethiopia-Djibouti Oil Pipeline Project
Reported April 30, 2023 – The Ethiopia-Djibouti Oil Pipeline Project features a 767-kilometer natural gas pipeline. It stretches from the Calub and Hilala gas fields in Ethiopia’s Somali (formerly Ogaden) region. Thereafter, the pipeline goes into a new port east of Djibouti City in Djibouti.
Quite impressively, it boasts a 12 billion cubic meters per year capacity. At an estimate, 10 billion cubic meters is said to be for export to China. The project’s ownership, as well as operation, is under the expertise of a subsidiary of the Golden Concord Group Limited, GCL-Poly.
On December 2019, Ethiopia’s Parliament gave approval for the Ethiopia-Djibouti Oil Pipeline Project’s construction. However, as of September 2021, reports indicate that there has been no substantial evidence that construction works for the US$ 1.14 billion project had begun.
The delay has been attributed to the security and political risks to the gas and oil sector within the region.
Reported On 25 Fed, 2015
US$ 1.4bn Ethiopia-Djibouti oil pipeline project given a green light
Construction of the US$ 1.4bn Ethiopia-Djibouti oil pipeline has got authorization to commence. The agreement signing between the two countries was on February 7 this month. According to the Ethiopian Ambassador to Djibouti Suleman Dedefo, the project will take three years.
The oil pipeline measures 550km in length. It will stretch from the Djibouti port to a fuel depot in Awash and find its way via Ethiopia’s eastern town, Dire Dawa. Awash, will then receive fuel distribution as a result of the project.
The oil pipeline construction project’s management will be by the US-based African infrastructure development company Black Rhino. The signing was by Ethiopia’s Minister for Mines, Tolosa Shagi.
Alongside Djibouti’s Minister for Energy in charge of Natural Resources, Ali Yacoub Mahamoud as a witness. The fuel reservoir project’s potential strives to minimize fuel transportation costs in the region and reduce the usage of trucks ferrying the fuel from Djibouti to Ethiopia.
At the moment, Ethiopia imports petroleum using trucks with benzene imported from Sudan to the local market. Other oil products from the Djibouti ports make up 80% percent of total oil imports.
Black Rhino Group and MOGS (Mining, Oil & Gas Services) had submitted a proposal for the oil pipeline project late last year.
Ethiopia-Djibouti Pipeline Project Factsheet
Project name: Damerjog–Dewele Refined Petroleum Products Pipeline
Project value: Approximately US$660 million
Pipeline length: Approximately 120 kilometres
Starting point: Damerjog petroleum hub, Djibouti.
End point: Dewele, Ethiopia’s Somali Region.
Project announcement and launch: September 24, 2026.
Project partners: Ethiopian Investment Holdings (EIH), Dangote Group and Djibouti’s state-owned investment firm.
Storage capacity: More than one million cubic metres combined.
Products to be transported: Refined petroleum products, including jet fuel, automotive gas oil (diesel) and premium motor spirit (petrol), as described at the launch.
Project objectives: Reduce reliance on road-based fuel transportation, lower logistics costs, improve fuel security, reduce delivery delays and strengthen regional trade.
Associated infrastructure: Marine receipt facilities, petroleum storage terminals, pipeline infrastructure and inland fuel distribution facilities.
Project Team
Project development partner: Ethiopian Investment Holdings (EIH)
Project development partner: Dangote Group
Port and marine logistics stakeholder: Damerjog petroleum hub, Djibouti
Inland storage and distribution location: Dewele, Ethiopia
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