Ethiopia and Djibouti signed framework agreements for the pipeline’s construction with the pipeline joint venture partners Black Rhino Group and Mining, Oil & Gas Services (MOGS).
The 20 inch dimeter, 550 km Horn of Africa Pipeline will transport diesel, gasoline and jet fuel from port access in Djibouti to central Ethiopia. The pipeline will have a capacity of 240,000 bbl/d of fuel. The project also includes an import facility and 950,000 bbl/d of storage capacity in Damerjog, Djibouti, linked to a storage terminal in Awash, Ethiopia, near Addis Ababa.
A final investment decision on the project is expected in 2016, with construction to be completed two years later. The pipeline is expected to be fully operational by the end of 2018.
Currently, Ethiopia imports fuel through the Port of Djibouti. Tanker trucks transport jet fuel, diesel and gasoline from the Port of Djibouti into Ethiopia. 500 trucks per day transport fuel to the load-center in the greater Addis Ababa area, travelling approximately 800 km of narrow two lane road.
The current fuel transportation system is reaching the upper limits of its capacity, and a purely trucking scheme will not be able to logistically meet Ethiopia’s demand requirements.
Black Rhino Group said that Ethiopia’s demand for refined oil products is growing at a rate upwards of 15 per cent annually. The company forecasts that, if compared to historically similar countries in a similar development path, Ethiopia’s demand for fuel will continue to increase at approximately 20 per cent annually.
“The pipeline will increase energy security, aid economic development and reduce harmful emissions,” Black Rhino Chief Executive Officer Brian Herlihy said.