Dangote and Ethiopia to Build $660m Djibouti Fuel Pipeline

Dangote Group and the Ethiopian government have signed a deal to construct a fuel pipeline between Djibouti and Ethiopia valued at $660 million, marking a major step in reshaping energy logistics in the Horn of Africa. The approximately 730-kilometer pipeline will follow the route of the existing Djibouti-Ethiopia railway corridor and carry refined petroleum products including diesel, gasoline, and jet fuel from the Port of Djibouti inland to Ethiopia. Construction is expected to take three years with completion targeted for 2029. The scheme was formalised in a memorandum of understanding signed by Ethiopia's Minister of Energy and the chief executive of the Dangote Group, which operates Africa's largest refinery, the 650,000 barrel-per-day facility in Lagos, Nigeria. Ethiopia currently imports all of its petroleum requirements and spends between $700 million and $1 billion annually on trucking fuel inland from Djibouti, a cost the pipeline is projected to reduce by 60 to 70 percent. Landlocked Ethiopia depends on the Port of Djibouti for roughly 90 percent of its imports, making the maritime corridor a strategic chokepoint. The country consumes around 6.4 million metric tonnes of refined products per year, a figure expected to climb to 8 million tonnes by 2030 as its economy expands. Existing fuel storage capacity is limited to only five to seven days of consumption, well below industry benchmarks. The pipeline's initial capacity is reported at roughly 700,000 barrels per month. For Qatar, the project opens a new avenue for engagement in the Horn of Africa's energy sector. Qatar is one of the world's leading exporters of liquefied natural gas and has been deepening diplomatic and commercial ties across the region, including mediation efforts in Sudan and investment in Somali infrastructure. The Dangote-Ethiopia pipeline adds a layer of competition and interdependence in a corridor where Gulf states including the United Arab Emirates and Saudi Arabia have already positioned themselves through port concessions and fuel supply agreements. If completed on schedule, the link would be the first dedicated fuel pipeline between Djibouti and Ethiopia, replacing a fleet of thousands of tanker trucks that currently carry the country's entire supply of imported fuel across rugged highland terrain.