DJIBOUTI’S Energy Ministry has signed a deal earlier this month with Ethiopia for the construction of a 767km gas pipeline between Ethiopia’s eastern Ogaden Basin and an export terminal on the Red Sea.
According to Djibouti’s Energy Minister Yonis Ali Guedi: ‘It is the most expensive project ever built in the Horn of Africa region.’ The total cost for the project has not yet been disclosed.
Chinese company Poly-GCL Petroleum Group Holdings Limited has been chosen to lead the construction of the project. Poly-GCL is a subsidiary of Golden Concord Group Limited and features a diverse range of activities from green energy generation to downstream activities including transport, storage and terminal management.
The company made a sizeable gas discovery last March in the Ogaden basin, with estimated reserves between six and eight trillion cubic feet. The field went into production in July 2018.
The pipeline announcement follows President of the African Petroleum Producers Organisation, Emmanuel Ibe Kachikwu’s disclosure that $2bn is needed to fund critical infrastructure in Africa’s energy sector, and called for enhanced collaboration between countries.
In another development, the Ethiopian Electric Power (EEP) on Tuesday signed a contract worth $40 million with China Gezhouba Group Co., Ltd (CGGC). CGCG will henceforth handle the pre-commissioning activities at the dam, which is expected to be operational by 2020.
‘CGGC is expected to work aggressively in partnership with other companies in order to complete the project as per schedule,’ EEP’s CEO Abrham Belay said.
EEP also signed a contract worth $113 million with Voith Hydro Shanghai, that includes the electrical, mechanical, and various civil/structural works required to complete the construction of the generating station and spillways of GERD.
A long overdue project
The 6,000-megawatt Grand Renaissance Dam is the centrepiece of Ethiopia’s bid to become Africa’s biggest power exporter.
Last year, Ethiopia’s prime minister Abiy Ahmed cancelled the contract of a state-run military conglomerate, Metals and Engineering Corporation (METEC), to build the dam’s turbines.
Abiy said at the time that not a single turbine was operational more than seven years after the government awarded the contract to METEC.
The dam has also been a source of constant friction between Egypt and Ethiopia’s competing energy and water interests respectively.
Egypt fears the project will reduce waters that run to its fields and reservoirs from the Nile river in Ethiopia’s highlands and via Sudan.
A Tripartite Infrastructure Fund that to deal with issues relating to the GERD was established in May last year, in addition to a resolution to regularise the summit of the leaders, to be held every six months alternately in the capitals of the three countries.