Addis Ababa:The newly announced Ethiopia-Djibouti petroleum products pipeline is set to transform fuel logistics by reducing the reliance on tanker trucks, decreasing transport costs, easing congestion, and speeding up fuel deliveries, according to Ethiopian Investment Holdings (EIH) CEO Brook Taye.
According to Ethiopian News Agency, the project involves developing a 120-kilometer refined petroleum products pipeline linking Damerjog in Djibouti to Dewele in Ethiopia, with a capacity exceeding one million cubic meters. This initiative is a collaboration between Ethiopian Investment Holdings and the Dangote Group.
The announcement was made with the presence of Ethiopian Prime Minister Abiy Ahmed, Djibouti President Ismail Omar Guelleh, and Dangote Group President Aliko Dangote. EIH CEO Brook highlighted that the pipeline would significantly reduce costs and improve efficiency compared to the current system of using tanker trucks over a 750-kilometer road journey.
Brook emphasized that the shift to a pipeline is a safer, more secure, and cost-effective method of transporting Ethiopia's most expensive import. He pointed out that delays at Djibouti's port can incur significant demurrage costs due to the unavailability of tankers or storage facilities.
The new infrastructure will allow vessels to unload directly into the depot, enabling faster transportation of petroleum products to Ethiopia. This change is expected to cut down the delivery time from vessel arrival to final delivery significantly.
Currently, about 35 percent of the trucks on the Djibouti-Ethiopia corridor are used for transporting petroleum products, contributing to congestion and high carbon emissions. The pipeline project aims to alleviate these issues while providing both direct and indirect economic benefits.
Brook explained that the revenue streams from the project would include direct income from the pipeline and tank farm usage and efficiency gains across the economy. Companies using diesel, benzene, and other petroleum products are expected to benefit from reduced costs and improved competitiveness.
Ethiopian Investment Holdings will be an equity partner alongside the Dangote Group, representing the government's interests in the project. This pipeline is part of a broader effort to align different products with the most suitable transportation method, ensuring economic growth and competitiveness.
