The governments of Ethiopia and Djibouti have signed an agreement for the construction of a new 765 km gas pipeline interconnection to transport Ethiopian gas to an export terminal in Djibouti. All but 65 km of the pipeline will be located in Ethiopia, whose government recently outlined plans to generate about US$1bn/year from the development of its gas resources.
This agreement comes more than a year after the Chinese company Poly-CGL agreed to invest US$4bn to build the gas pipeline, an associated liquefaction plant and an export terminal in Damerjog, near Djibouti’s border with Somalia. According to the March 2016 agreement, the pipeline would ship up to 12 bcm/year from Ethiopian fields to Djibouti, where it would be liquefied at a 10 Mt/year (13.5 bcm/year) LNG plant. Initially expected for 2019, the projects have been delayed until now.
Poly-CGL is a joint venture (JV) between the state-owned company China Poly Group Corporation and the privately owned Hong Kong-based Golden Concord Group. It is developing Ethiopia's Calub and Hilala gas fields under the framework of a production sharing contract (PSC) signed with the Ethiopian government in 2013.