Nigerian billionaire Aliko Dangote, Ethiopia and Djibouti have launched a $660 million project to build a refined petroleum products pipeline linking the two East African countries, in a move aimed at strengthening energy security and improving the movement of fuel across the region.
The Damarjog-Dewele Oil Terminal and Pipeline Project was launched during a ceremony in Djibouti attended by Ethiopian Prime Minister Abiy Ahmed, Djibouti President Ismaïl Omar Guelleh and Dangote, president and chief executive of the Dangote Group. The groundbreaking ceremony took place on Thursday, September 24.
The project involves the construction of a 120-kilometre multiproduct pipeline connecting marine and coastal storage facilities at Damarjog in Djibouti with inland storage and distribution facilities at Dewele in Ethiopia.
The pipeline will be supported by storage facilities at both ends. About 375,000 cubic metres of storage capacity is planned at Damarjog, while approximately 800,000 cubic metres will be available at Dewele, giving the system a combined capacity of about 1.175 million cubic metres.
According to Ethiopian officials, the project is expected to become operational within 18 months. It is being developed through a partnership involving Ethiopian Investment Holdings and the Dangote Group.
Dangote said the investment forms part of his group’s broader efforts to develop infrastructure that supports economic growth and greater self-sufficiency across Africa.
“This project is designed to enhance energy security, improve supply-chain efficiency, and create sustainable economic value for both Djibouti and Ethiopia,” Dangote said at the ceremony.
He added that Djibouti was expected to benefit from increased port activity, higher revenues and new employment opportunities, while Ethiopia would gain improved energy security and fewer logistical constraints.
Ethiopia is landlocked and relies heavily on Djibouti as its principal maritime gateway. Much of the petroleum products imported through Djibouti are currently transported inland by road tankers, making the corridor an important part of Ethiopia’s fuel supply chain.
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The new pipeline is intended to reduce that dependence on road transportation by providing a dedicated system for moving refined petroleum products from Djibouti’s coast into Ethiopia.
Prime Minister Abiy said the project would provide a more reliable and cost-effective way of transporting fuel into Ethiopia.
“This pipeline will provide a modern, dependable, and cost-effective system for transporting refined petroleum products into the country, thereby enhancing our energy security and reducing supply-chain vulnerabilities,” Abiy said.
He said the benefits would extend beyond the energy sector, noting that reliable access to petroleum products would support aviation, transportation, agriculture, manufacturing and construction.
The Ethiopian government has also said the pipeline could reduce delays and logistics costs along the Ethiopia-Djibouti corridor.
The new pipeline is expected to shorten the time required to transport refined petroleum products into Ethiopia, while reducing reliance on road tankers and improving the efficiency of fuel distribution along the Ethiopia-Djibouti corridor.
Strengthening Djibouti’s Regional Role
For Djibouti, the project represents another step towards strengthening its position as a regional logistics and energy hub. The country sits on one of the major maritime routes connecting the Red Sea with the Gulf of Aden and serves as a crucial trade gateway for landlocked Ethiopia.
President Guelleh described the pipeline as an important investment in the region’s future.
“Today marks an important chapter in Djibouti’s journey toward becoming a premier centre for logistics, energy, and industrial development. The Damarjog-Dewele Pipeline Project is not merely infrastructure; it is an investment in the future prosperity of our region,” he said.
He said the project would increase trade volumes, expand port operations, attract additional investment and create employment.
The pipeline is also expected to improve the reliability of fuel supplies by allowing petroleum products to be stored closer to both the coastal entry point and the Ethiopian market. Officials say the system could reduce some of the risks and costs associated with transporting large volumes of fuel over long distances by road.
The investment adds to Dangote Group’s growing business interests across Africa. The group is already involved in major industrial projects in Ethiopia, including a planned fertiliser and power development, while Dangote’s Nigerian refinery has become a major part of the company’s energy strategy.
For Ethiopia and Djibouti, the pipeline represents a major infrastructure investment along a corridor that is already central to regional trade. Once completed, the project is expected to provide a more direct route for refined petroleum products, while strengthening fuel storage capacity and reducing logistical pressure on road transport.
The $660 million project places energy infrastructure at the centre of growing economic cooperation between Ethiopia, Djibouti and Dangote, with the pipeline expected to become operational within the targeted 18-month timeline.
