Ethiopia, Djibouti and Dangote break ground on $660m fuel pipeline

The 120-kilometre refined-products link will connect Damerjog in Djibouti with Dewele in Ethiopia, with the developers targeting operations within 18 months.

Ethiopia, Djibouti and the Dangote Group have begun work on a planned $660 million petroleum-products pipeline intended to move refined fuel from the Djiboutian coast to eastern Ethiopia.

The project was announced and formally launched at a ceremony in Djibouti on Thursday, September 24, attended by Ethiopian Prime Minister Abiy Ahmed, Djibouti President Ismail Omar Guelleh and Dangote Group President and Chief Executive Aliko Dangote. The partnership involves Ethiopian Investment Holdings and the Dangote Group. ([ena.et](https://www.ena.et/web/eng/?cat=40&utm_source=openai))

A 120-kilometre connection

The planned multi-product pipeline will run for about 120 kilometres between marine and coastal storage facilities at Damerjog, on Djibouti’s coast, and inland storage and distribution facilities at Dewele in Ethiopia. The project is designed for refined petroleum products rather than crude oil.

Information released by the Ethiopian side says the facilities will include about 375,000 cubic metres of storage at Damerjog and 800,000 cubic metres at Dewele. Ethiopian state media has also described the combined storage capacity as about 400 million litres. The developers have said the infrastructure should become operational within 18 months. ([es.finance.yahoo.com](https://es.finance.yahoo.com/noticias/yibuti-etiop%C3%ADa-multimillonario-nigeriano-dangote-120948139.html?utm_source=openai))

Why the corridor matters

Ethiopia is landlocked and relies on Djibouti’s port infrastructure for a major share of its external trade. Fuel currently moves along the corridor by road, making the supply chain dependent on tanker movements and road logistics. The pipeline is intended to reduce transport delays and logistics costs while creating additional storage capacity inside Ethiopia.

Those benefits remain projections from the project’s sponsors, not outcomes that have yet been independently demonstrated. The pipeline has been announced and launched, but it is not yet operational.

What remains unclear

The public information available does not establish the project’s financing structure, ownership percentages, construction contractor, throughput capacity or tariff arrangements. Details of the environmental and social assessment process have also not been made public in the material reviewed for this report.

The 18-month completion target should therefore be treated as a stated project timetable rather than a guaranteed delivery date. The next significant tests will be whether the partners disclose detailed project agreements, begin visible construction beyond the foundation-stone ceremony and maintain the proposed schedule.

For Ethiopia, the project’s significance will ultimately depend on whether it can reduce reliance on road fuel transport without creating new bottlenecks at the terminals, border facilities or distribution network. For Djibouti, the investment could increase activity around Damerjog, but its commercial impact will depend on the final operating model and the volume of fuel handled.

Abiy Ahmed is Ethiopia’s current prime minister, Guelleh is Djibouti’s current president and Dangote remains president and chief executive of the Dangote Group, according to current official institutional records. ([pmo.gov.et](https://pmo.gov.et/administration?utm_source=openai))

Sources