Ethiopia and Djibouti concluded an agreement giving a green light for the construction of an oil pipeline that stretches across the two countries. The pipeline is going to be managed by the US based African infrastructure development company Black Rhino.

The agreement was inked on Saturday, February 7, 2015 by Tolosa Shagi, Ethiopian Minister of Mines and Ali Yacoub Mahamoud, Djibouti’s Minister of Energy in charge of Natural Resources Department. The fuel reservoir project is said to cost USD 1.4 billion and expected to minimize fuel transportation cost.

The land locked country, Ethiopia, imports petroleum via road using trucks, which is costly. Benzene makes to the domestic market after being imported from Sudan. Nonetheless, other oil products that make up 80 percent of the total oil import come through the Djibouti ports.

The plan is to construct a pipeline that stretches from the Djiboutian sea ports to a fuel depot in Awash finding its way via Ethiopia’s eastern town, Dire Dawa. It is going to be 550 kilometers long and expected to minimize fuel trucks that make the trek from Ethiopia to Djibouti. The fuel is at the end going to be distributed to the whole nation form Awash.

According to Ethiopian Ambassador to Djibouti, the project is expected to be completed in three years time. The project is a private investment where expenses are fully covered by the undertaker Black Rhino, he furthered.

Black Rhino was founded with an aim to address the critical needs for infrastructure and energy development across the African continent. It tries to capitalize major investment opportunities in the energy sector. Projects it engages in includes power generation, transmission, fuel storage and pipelines.

Source: Capital