Ethiopia and Djibouti signed agreement for installation of 765 kilometers gas pipelines between the two countries.
When completed in 2020, the pipeline will enable Ethiopia sell its gas resource from Calub and Hilala fields in Ogaden area of Somali Region via Djibouti Port. Calub and Hilala fields have deposits of 4.7 trillion cubic feet of gas and 13.6 million barrels of associated liquids, both discovered in the 1970s but not yet exploited.
The two countries have signed agreement on Friday, according to the official facebook page post of the Ministry of Mines ad Energy of Ethiopia. Minister of Ethiopia’s Mines and Petroleum Samuel Urkato (PhD) and Djibouti’s Energy and Natural Resources Yonis Guldi have signed the deal.
Ethiopia expects over one billion dollars annual income by selling gas to the global market.
The 700 kilometers pipeline will be installed in Ethiopian Territory while 65 kilometers will be within Djibouti territory.
About seven moths ago, Ethiopia has awarded production of Calub gas for the Chinese company Poly -GCL Petroleum Ltd, which has been on test production of 400 barrels of liquidized gas a day. Meanwhile the project has faced some challenges following the crisis in the Somali region led by Abdi Illey, who is now facing trial for human rights violations.
The pipeline is expected to transport up to 12 million cubic meters of gas from the Ethiopian hinterland to the coast of neighboring Djibouti, where it will build a 3 Metric Tonnes Per Annum (mtpa) liquefied natural gas (LNG) plant and export terminal.
Initial construction is expected to take three years to complete. The plant’s capacity could eventually be extended to 10 mtpa. POLY-GCL estimates the cost of this construction at $4 billion.
Ethiopia is expected to join the major natural gas producers when it is going to start extraction of the recently found vast natural gas reserve in Arba Minch in the Southern part.
Ethiopia and Djibouti are already connected via railway, electricity and water supply.