Ethiopia and Djibouti to build gas pipeline

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Ethiopia and Djibouti to build gas pipeline

As a move to transport Ethiopian gas to an export terminal in the Red Sea Estate of Djibouti, besides the Sea of Aden, Ethiopia and Djibouti had recently sealed a deal to build a pipeline carrying Ethiopian gas to the export terminal of Djibouti, an Ethiopian official revealed on Sunday, the 17th of February, 2019.

During the 1970s, Ethiopia found an extensive natural gas resource in its eastern Ogaden Basin and since then, the Ethiopian gas had been one of the most significant landmark resources in the southern part of Africa. However, at present, China’s POLY-GCL petroleum investments have been developing the gas fields of Calub and Hilala, followed by signing a production sharing agreement between the Ethiopian government and China’s POLY-GCL in 2013.

Previously, a year earlier, China’s POLY-GCL had signed an agreement with Djibouti to invest around $4 billion for building the natural gas pipeline, a plant for liquefaction, alongside an export terminal at Damerjog, located near the nation’s border with Somalia.

The production and transportation were expected to start last year, however, Ethiopian government said that the production would likely to start from the first quarter of 2020. Citing the deal as the most extensive project ever built in Africa, Djibouti’s energy minister, Yonis Ali Guedi said to the reporters, “The two parties have reached an agreement in principle to allow them to benefit from the project in an equitable manner. It is the most expensive project ever built in the Horn of Africa region. ”