Ethiopia and its neighbour Djibouti signed on Tuesday an agreement to construct a $1.55 billion fuel pipeline which stretches from Djibouti’s Damerjog to Awash in central Ethiopia, construction firms announced on Thursday.
The two neighbours signed the agreement with developers Mining, Oil and Gas Services and Black Rhino Group owned by funds of US investment firm, Blackstone Group.
According to the companies, the 550-kilometer pipeline will import diesel, gasoline and jet fuel from Djibouti coast to Ethiopia.
The project due for completion in 2018 is said to ease transport burdens for land locked Ethiopia which had been importing fuel from Djibouti by tanker trucks.
The Pipeline project includes an import facility and 950,000 barrels of storage capacity in Damerjog, Djibouti, linked to a storage terminal in Awash, Ethiopia.
The 20-inch (51-centimetre) line is capable of transporting 240,000 barrels a day of fuel.
The joint venture, whose cost to be shared between the two countries is said to boost economic ties between the two neighbours.
The two countries had invested billions of dollars to construct a numer of joint infrastructure including a recently completed railway linking the capitals of the two nations.
“The pipeline will increase energy security, aid economic development and reduce harmful emissions” said Brian Herlihy, Black Rhino chief executive officer.
In a statement, CEO of Mining, Oil & Gas Services Errol Gregor said the project, named as “the Horn of Africa Pipeline Mining”, will sustain the momentum of economic growth and growing fuel demand in both Djibouti and Ethiopia.
According to the International Monetary Fund (IMF), Ethiopia is among the 10 fastest growing economies in the world.
The horn of Africa’s nation which intends to join middle income countries by 2025 is spending billions of dollars to expand large infrastructure projects.
SOURCE: Sudan Tribune.