global lng market
Featured image: Stock

In east Africa, Ethiopia and Djibouti have signed a deal to build a pipeline to transport Ethiopian gas to an export terminal in the Red Sea state.

Ethiopia found extensive gas deposits in its eastern Ogaden Basin decades ago, reports THISDAY.

China's POLY-GCL Petroleum Investments has been developing the Calub and Hilala fields there since signing a production sharing deal with Ethiopia in 2013.

According to Reuters, the agreement between Djibouti and Ethiopia comes more than a year after POLY-GCL signed a memorandum of understanding with Djibouti to invest $4 billion to build the natural gas pipeline, a liquefaction plant and an export terminal to be located in Damerjog, near the country's border with Somalia.

It was envisaged that production would start in 2018, but the Ethiopian government has indicated that operations will likely happen in 2020.

Horn of Africa’s first gas pipeline

Djibouti's Energy Minister Yonis Ali Guedi told Reuters that the deal hammered out "key terms that will serve as a basis" for related concession contracts.

“It is the most expensive project ever built in the Horn of Africa region,” according to Guedi.

“The two parties have reached an agreement in principle to allow them to benefit from the project in an equitable manner,” he said.

Africa's eastern seaboard could soon become a major global producer of liquefied natural gas, with other planned projects based on big gas finds made in Tanzania and Mozambique. Read more: Tanzanian gas supplier secures deal with TPDC and TANESCO