Dangote Industries Limited (DIL) has signed a 25 year natural gas supply agreement with China’s GCL Group to support a planned fertilizer project in Ethiopia.
The agreement, valued at USD 4.2 billion, was signed in Lagos and will supply gas to Dangote Group’s planned urea fertilizer plant in Gode, in Ethiopia’s Somali Region. The project is designed to produce 3 million tonnes of urea annually.
The fertilizer plant, estimated to cost USD 2.5 billion, is being developed through a joint venture between Dangote Group and Ethiopian Investment Holdings (EIH), under a 60:40 equity structure. Operations are expected to begin in 2029.
Natural gas for the project is expected to come from the Calub Gas Field in Ethiopia’s Ogaden Basin and be transported to the plant through a dedicated 108 kilometre pipeline.
According to the parties, the project is intended to support domestic fertilizer production in Ethiopia and reduce reliance on imports, while also serving nearby regional markets.
Speaking at the signing, Dangote Industries President and Chief Executive Officer Aliko Dangote said the project reflects an effort to link natural gas development with fertilizer production in Africa. Zhu Gongshan, Chairman of GCL Group, said the partnership would expand the companies’ activities in Ethiopia’s energy, chemical, and food security sectors.
The companies said the Ethiopian government played an important role in facilitating the project. GCL also pointed to its existing involvement in Ethiopia’s oil and gas sector, including earlier work related to natural gas development.
Analysts say the project could have wider economic implications, including increased industrial activity in the Somali Region, job creation, and additional infrastructure development. The project also brings together gas extraction, transport, and fertilizer manufacturing within a single supply chain.
The agreement adds to ongoing efforts to expand large-scale industrial and energy projects in Ethiopia and reflects growing cooperation between African and Chinese companies in strategic sectors.
Source: MSN
