Africa’s richest man just locked in a massive gas pipeline deal in East Africa

In a major move for East African energy infrastructure, the Dangote Group and Ethiopian Investment Holdings (EIH) have received approval to install a series of oil and gas pipelines running through Djibouti.

• The Dangote Group and Ethiopian Investment Holdings have secured approval to build oil and gas pipelines through Djibouti.
• The project aims to connect landlocked Ethiopia directly to international shipping lanes, overcoming a major logistical barrier.
• The first phase will create a refined oil product pipeline from Djibouti's port to Dawale in southeastern Ethiopia.
• The second phase will extend pipelines to transport natural gas and crude oil from Ethiopia’s Somali region to international markets via Djibouti.

Djibouti President Ismail Omar Guelleh officially approved the proposal during a high-profile meeting with Ethiopian officials, which included the CEO of EIH, Brook Taye.

The execution of this proposal marks a crucial expansion of Nigerian billionaire Aliko Dangote’s business empire across Africa’s east coast.

DON'T MISS THIS: Dangote increases investment in Ethiopia's 3million ton fertilizer plant to $4 billion, including new power and pipeline projects

While Ethiopia continues to be plagued by the numerous downsides of being a landlocked country, this project, when completed, will give the East African nation the opportunity to connect directly with international shipping lanes.

The proposed pipeline project is divided into two major phases. During the first phase, the two collaborating companies will construct a pipeline for already refined crude oil products.

This particular pipeline will be designed to link the port of Djibouti to Dawale, which is located in the southeastern region of Ethiopia.

The second phase will involve laying pipelines for natural gas and crude oil. These pipelines will be used to transport resources from Ethiopia’s Somali region through Djibouti to reach international markets.

This pipeline agreement builds on an existing collaboration between EIH and the Dangote Group.

The two companies are already mid-construction on a $4 billion fertilizer complex in Ethiopia’s Somali region. That facility is set to include its own dedicated natural gas pipeline and a 120-megawatt power plant.

Dangote Group's East African Expansion

For Aliko Dangote, this venture is part of a broader five-year strategy in which Ethiopia is slated to receive approximately 9% of his total planned investment, making it his second-largest focus area after Nigeria.

DON'T MISS THIS: Dangote increases investment in Ethiopia's 3million ton fertilizer plant to $4 billion, including new power and pipeline projects

Dangote Group has expanded its investment in the fertiliser complex under development in Ethiopia’s Gode region to over $4 billion, up from an earlier estimate of about $2.5 billion, as the project scope broadens to include additional infrastructure such as pipelines, power generation and downstream processing facilities.

The Nigerian billionaire is reportedly looking to replicate the success of his massive 650,000-barrels-a-day refinery in Nigeria by establishing at least one crude refinery on Africa's east coast.

This latest agreement with Djibouti and Ethiopia provides the essential infrastructure to make that vision a reality.

Victor Awogbemila