New gas pipeline between Ethiopia and Djibouti

Reuters reports that Ethiopia and Djibouti have signed a deal to build a pipeline to transport Ethiopian gas to an export terminal in the Red Sea state.

According to Reuters, Ethiopia and Djibouti’s agreement comes over a year after POLY-GCL signed a memorandum of understanding (MOU) with Djibouti to invest $4 billion (€3.5 billion) to build the natural gas pipeline. The MOU also included the construction of a liquefaction plant and an export terminal located in Damerjog, close to the country’s border with Somalia.

Although originally production was supposed to start in 2018, the Ethiopian government has said that it is now likely to start in 2020.

Djibouti’s Energy Minister, Yonis Ali Guedi told Reuters that the deal laid out, “key terms that will serve as a basis” for related concession contracts.

“It is the most expensive project ever built in the Horn of Africa region,” he said. “The two parties have reached an agreement in principle to allow them to benefit from the project in an equitable manner.”