Fuel trade to increase between Ethiopia and Djibouti through pipeline deal

The pipeline is expected to boost economic growth and strengthen the Ethiopian supply chain

In East Africa, project developer Black Rhino Group and South African service provider Mining Oil & Gas Services, have signed a $2 billion (ZAR26 billion) pipeline construction deal. The pipeline will run between Ethiopia and Djibouti in order to mobilise cross-border oil trade between the two neighbours.

The contractors are expected to raise a minimum of $1 billion (ZAR13 billion) to finance the pipeline construction, the Construction Review Online reported.

Facilitating trade

The pipeline, which is expected to stretch across 550km, will transport petrol, diesel and jet fuel from Damerjog port in Djibouti to Awash terminal in Ethiopia.

This will reduce the time and money spent on the current transport system, which is currently being distributed over a 800km mountainous route.

Energy security

The pipeline project, which is due for completion in 2018, is aiming to boost energy security and economic development.

Brian Herlihy, Chief Executive Officer of Black Rhino said: “The pipeline will increase energy security, aid economic development and reduce harmful emissions and will be complete by 2018.”

With attempts to ensure a sustainable energy future, Ethiopia has come on board with various power projects including the Ethio-Kenya transmission project as well as hydro, wind and geothermal projects.

Investing in R&D

In other regional news, last month, developer of solar-biogas hybrid power technology, AORA Solar, signed a Memorandum of Understanding to promote academic cooperation of renewable energy technologies in Ethiopia.

This move is to support the implementation of Ethiopia’s Climate Resilient Green Economy Strategy, which plans to make Ethiopia a carbon-neutral middle-income country by 2025