Ethiopia, Djibouti Sign $1.1bn Pipeline Deal

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Ethiopia and Djibouti have signed a $1.1bn (over £71m) deal to construct a 550km petroleum pipeline between the two countries.

Black Rhino Group and South African service provider, Mining Oil & Gas Services (MOGS), have been contracted to build the pipeline, which will transport petrol, diesel and jet fuel across the nations’ order.

 

A more efficient trade route

The new pipeline will run from Djibouti’s Damerjog port to Awash terminal in Ethiopia, creating a faster and more cost-effective route between the two countries. The current transport system means oil products are delivered by road – over an 800km journey across mountainous terrain.

The pipeline project will reduce the transport cost of oil products between Djibouti and Ethiopia, while increasing security and the volume of trade between the East African neighbours.

 

The Horn of Africa project

Dubbed the Horn of Africa project, Black Rhino group expects the new pipeline to be completed by 2018 and Chief Executive, Brian Herlihy, is confident the new pipeline will be an economic asset to both countries.

“The pipeline will increase energy security, aid economic development and reduce harmful emissions and will be complete by 2018,” he said.

South Africa’s Mining Oil & Gas Services (MOGS) will partner Back Rhino in the construction process, with the two firms expected to raise more than $1 billion to finance the project.

MOGS Chief Executive Officer, Errol Gregor, highlights the economic importance of a new pipeline between Djibouti and Ethiopia, as demand increases.

“The Horn of Africa project will sustain the momentum of economic growth and growing fuel demand in both Djibouti and Ethiopia by enabling high-quality, consistent energy supply at reasonable cost points,” he said.

 

Featured image:

Pipes for keystone pipeline in 2009” by shannonpatrick17 from Swanton, Nebraska, U.S.A. – keystone pipeline. Licensed under CC BY 2.0 via Commons.

About Aaron Brooks

Aaron Brooks is a UK journalist who wants to cut out the international agendas in news. Spending his early years in both England and Northern Ireland he saw the difference between reality and media coverage at an early age. After graduating from the University of Chester with a BA in journalism, his travels revealed just how large the gap between news and the real world can be. As Editor-in-Chief at East Africa Monitor, it’s his job to provide a balanced view of what’s going on in the region for English-speaking audiences.