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ADDIS ABABA — Ethiopia and Djibouti have launched a major new petroleum infrastructure project designed to strengthen Ethiopia’s fuel supply chain and deepen economic integration between the two neighboring countries.
Prime Minister Abiy Ahmed and Djiboutian President Ismaïl Omar Guelleh joined African industrialist Aliko Dangote on Thursday for the groundbreaking of a petroleum storage and pipeline project at the Damerjog Industrial Park in Djibouti.
The project is being developed through a partnership involving Ethiopian Investment Holdings (EIH) and the Dangote Group, with the initial investment estimated at $160 million.
At the center of the development is a planned petroleum products pipeline connecting Damerjog in Djibouti with Dewele in eastern Ethiopia, creating a new route for transporting refined fuel into the landlocked Ethiopian market.
120-Kilometre Pipeline to Connect Ethiopia With Djibouti
According to project details released in Djibouti, the planned cross-border pipeline will stretch approximately 120 kilometres, linking petroleum infrastructure at Damerjog with the Ethiopian border town of Dewele.
The pipeline is expected to provide Ethiopia with an alternative to the large-scale movement of petroleum products by tanker trucks.
For a country with a population of more than 120 million and rapidly growing transport, industrial and energy demand, improving the efficiency of petroleum imports could have significant economic implications.
The infrastructure is intended to reduce transportation bottlenecks, lower logistics costs and strengthen the reliability of Ethiopia’s fuel supply. Djiboutian authorities also say the pipeline could help reduce road congestion and the environmental impact associated with transporting petroleum products by truck.
Massive New Petroleum Terminal at Damerjog
The pipeline forms part of a broader energy infrastructure development centered on the Damerjog Industrial Park.
The planned petroleum storage terminal will cover approximately 80 hectares and have a storage capacity of around 375,000 cubic metres.
It is being designed to handle as much as 5 million tonnes of petroleum products annually, making it a potentially important component of the Ethiopia-Djibouti energy corridor.
The terminal will also be connected to the Damerjog-Nagad railway and Djibouti’s bulk liquid petroleum infrastructure, creating multiple options for moving petroleum products through the logistics network.
Ethiopia Looks to Strengthen Energy Security
For Ethiopia, the project comes as the government seeks to improve the reliability and cost efficiency of the country’s international logistics infrastructure.
As a landlocked economy, Ethiopia depends heavily on Djibouti for its international trade.
The new petroleum pipeline could reduce part of the country’s dependence on tanker trucks carrying fuel from Djiboutian ports into Ethiopia, while creating a more predictable system for moving large volumes of refined petroleum products.
Project proponents say the infrastructure is expected to help reduce delays, transportation costs and the risk of supply disruptions.
Prime Minister Abiy Ahmed described the initiative as part of a broader strategic investment aimed at strengthening regional connectivity, energy security and economic cooperation between Ethiopia and Djibouti.
Dangote Expands East African Energy Footprint
The involvement of Aliko Dangote’s Dangote Group gives the project a wider African business dimension.
Dangote has built one of Africa’s largest industrial groups, with operations spanning cement, manufacturing and petroleum refining.
Its partnership with Ethiopian Investment Holdings on the Djibouti-Ethiopia corridor represents another major infrastructure investment tied to the movement and distribution of petroleum products in Africa.
Discussions involving Ethiopian Investment Holdings, Dangote Group and the Djiboutian government had been underway for months, including talks on a phased series of energy development projects involving Ethiopia and Djibouti.
A Strategic Ethiopia-Djibouti Trade Corridor
The project also reinforces the economic interdependence between Ethiopia and Djibouti.
Djibouti has become Ethiopia’s primary maritime gateway, with ports, roads and rail infrastructure connecting the two economies.
The new petroleum terminal and pipeline would add dedicated energy infrastructure to that network.
Djiboutian authorities say the project could also generate several hundred local jobs and create opportunities for companies operating in construction, logistics, maintenance and related services.
Beyond supplying Ethiopia, planners have indicated that the infrastructure could eventually support broader regional energy trade and potentially facilitate the movement of energy resources toward international markets.
If completed as planned, the Damerjog-Dewele pipeline would represent more than a new fuel transportation route. It would become another major piece of infrastructure linking the economies of Ethiopia and Djibouti, while bringing one of Africa’s largest private industrial groups into one of the Horn of Africa’s most strategically important trade corridors.
