ADDIS ABABA

Ethiopia and Djibouti have launched talks on a cross-border oil and gas corridor to reshape energy trade and logistics in the Horn of Africa, the Djibouti Ministry of Energy, which oversees natural resources, announced Thursday.

Djibouti President Ismail Omar Guelleh met with Brook Taye, CEO of Ethiopian Investment Holdings, at the presidential palace to discuss the project, which would expand Ethiopia’s partnership with Nigeria’s Dangote Group in Djibouti.

The multibillion-dollar project is designed to improve Ethiopia’s fuel supply and create new export routes for oil and natural gas.

According to Djibouti’s Ministry of Energy, the first phase would focus on fuel imports for landlocked Ethiopia.

A pipeline would transport refined petroleum products from Djibouti’s ports to Daweleh in eastern Ethiopia, reducing reliance on trucking routes and lowering transportation costs.

The second phase would involve separate pipelines for crude oil and natural gas from Ethiopia’s Somali Regional State to Djibouti’s coast for export to global markets.

The plan would provide Ethiopia with its first large-scale energy export corridor.

During the meeting, Brook said Ethiopia and the Dangote Group were ready to formalize the projects. Guelleh welcomed the proposal and called for faster implementation.

The talks come as Ethiopia and the Dangote Group accelerate development in the Ogaden Basin.

Earlier this month, Ethiopian Prime Minister Abiy Ahmed and Dangote Group founder Aliko Dangote visited the Gode industrial complex, where the company announced plans to increase investment from $2.5 billion to more than $4 billion.

The project includes a urea fertilizer plant expected to produce up to 3 million metric tons annually, along with a 110-kilometer (68-mile) pipeline, a 120-megawatt power plant, a polypropylene packaging facility and a 2 million-ton fertilizer blending plant.

The joint venture between Ethiopian Investment Holdings and the Dangote Group is backed by a long-term gas supply agreement with China’s GCL Group tied to the Calub and Hilala gas fields.

Ethiopian Investment Holdings has also requested land at Djibouti’s Damerjog Industrial Park for a fuel storage facility that would support the pipeline network.

The project is expected to support Ethiopia’s domestic fuel and fertilizer supply while creating new oil and gas export routes through Djibouti’s ports.