Africa's richest man, Ethiopia and Djibouti to build $600m fuel pipeline

Africa’s richest man, Ethiopia and Djibouti plan $600m fuel pipeline

Aliko Dangote built his wealth from cement in Nigeria

Nigerian billionaire Aliko Dangote, along with Ethiopia and Djibouti, has agreed to develop a $600m (£447m) petroleum pipeline and storage project linking the two countries.

The scheme will feature a 120km- (75 mile-) pipeline running from Djibouti’s Damerjog port to a distribution facility in Dewele, Ethiopia, together with storage capacity of around 400 million litres.

It is expected to start operating within 18 months.

Ethiopian Prime Minister Abiy Ahmed said the pipeline would cut the time required to move fuel from Djibouti’s port to the Ethiopian capital, Addis Ababa, from five days to one.

The first phase will carry major petroleum products, including jet fuel, diesel and petrol.

At the groundbreaking ceremony, Dangote said the project would bolster Ethiopia’s energy security and make its fuel supply chain more resilient.

Landlocked Ethiopia depends heavily on Djibouti’s port for imports, including petroleum products. The new infrastructure is expected to ease pressure on existing transport systems serving industries such as transport, aviation, agriculture and construction.

Djibouti is also expected to gain from greater port activity, job creation and increased government revenues.

The project is part of Dangote’s broader 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, with the aim of raising about $1.63bn (£1.2bn).

In Kenya, the company is set to break ground next week on a proposed 700,000-barrel-a-day crude oil refinery in Lamu.