Wed. May 25th, 2022

A huge gas project comprising a 700km pipeline from Ethiopia to Djibouti, a liquefaction plant and an export terminal in Djibouti has been officially launched.

The $4bn project, funded by Chinese firm POLY-GCL Petroleum Group is expected to start shortly and be finished in three years, reports Fortune Addis.

A foundation stone-laying ceremony was held in the small Djibouti coastal village of Damerjog, the location of the pipeline terminus and port.

The new pipeline will transport up to 12 billion cubic metres of natural gas from Ethiopia to Djibouti for shipping to China. The liquefaction plant will be able to produce to 10 million tonnes of liquefied natural gas per year.

In November 2013 the Ethiopian government granted POLY-GCL oil and gas exploration and development contracts for 10 blocks in the Ogaden Basin, an area covering up to 117,000 square kilometres, the Chinese company said on its website.

Last year Ethiopian Mines Minister Tolossa Shagi said the country expects to make in excess of $1 billion in annual foreign exchange earnings from gas exports, after Chinese company discovered 4.7 trillion cubic feet of natural gas.

The gas project will be the second major joint energy infrastructure project agreed between Djibouti and Ethiopia.

In September 2015, the two signed a $1.5bn agreement to build a 550km pipeline for refined petroleum linking Djibouti’s ports to the Awash terminal in central Ethiopia.

Black Rhino Group and Mining Oil & Gas Service will construct the pipeline with completion scheduled for 2018.

Image: Oil exploration blocks in the Ogaden Basin of Ethiopia. Data from Ethiopian Ministry of Mines and Energy (Gralo/Wikimedia Commons)

By Rasaas