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  • Matt Spencer

Horn of Africa Pipeline project: The $1.55 billion Djibouti-Ethiopia Pipeline Deal

Horn of Africa Pipeline project: The $1.55 billion Djibouti-Ethiopia Pipeline Deal


Landlocked Ethiopia has partnered with Djibouti to construct a 550 kilometre fuel pipeline to transport diesel, petrol and jet fuel from port access in Djibouti to central Ethiopia. The deal (signed by Djibouti, Ethiopia as well as two developers; Black Rhino Group and South African-based Mining Oil & Gas Services (MOGS) is expected to cost $1.55 billion.

The pipeline has an estimated transporting capability of 240,000 barrels of fuel per day and is expected to be complete in the 2018 financial year.

The Horn of Africa Pipeline project will also include an import facility and 950,000 barrels of storage capacity in Damerjog, Djibouti, linked to a storage terminal in Awash, Ethiopia.

What is the current transport system from Djibouti to Ethiopia?

Currently fuel is typically delivered by tanker truck to Ethiopia. Approximately 500 trucks per day transport fuel across 800km narrow two lane road, to the load-centre in Addis Ababa.

The current fuel transportation system is reaching the upper limits of its capacity, and a purely trucking scheme will not be able to logistically meet Ethiopia’s demand requirements. Trucking fuel will reach its ceiling, and start curbing Ethiopia’s­­­­­­­­­ economic growth within the next two years. The trucking system causes issues with adulteration and theft of product in transit and road conditions.

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How will the construction of this pipeline benefit the Horn of Africa countries?

  1. The new link is expected to bolster economic ties between the Horn of Africa nations.

  2. Ethiopia is also building a new railway line to Djibouti which is expected to become a regional shipping hub.

  3. Black Rhino’s chief executive Brian Herlihy said that the pipeline is expected to address the following:

  4. Energy security

  5. Aid economic development

  6. Reduce harmful emissions

The Horn of Africa Pipeline project is expected to expand import efficiencies and capacities, immediately unlocking GDP growth potential by filling demand and providing an economic option for fuel transportation.

Things are looking up in the Horn of Africa, I’d say. What do you think?

[Source]

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