Private companies have proposed to the Ethiopian and Djibouti governments a $1.4 billion pipeline to bring petroleum to a distribution centre in Awash, Ethiopia. It would take two years to complete.
The companies which made the proposal 6 months ago are Black Rhino Group, owned by private equity firm Blackstone, and MOGS (Mining, Oil & Gas Services), owned by Royal Bafokeng Holdings, a South African investment group, according to this report in Addis Fortune newspaper.
Ethiopian Petroleum Supply Enterprise (EPSE) plans to import 2.9 million tonnes of fuel this year and last year this was 2.6m tonnes. Some of the fuel comes from Sudan.
They are proposing to build 550 kilometres of pipeline, carrying oil directly from the vessels at the port to a storage facility in Awash, from where it would be distributed by trucks from Awash to the rest of the country, including Addis Abeba. According to the report, the Djibouti government has told Black Rhino and MOGS that the current port infrastructure is not big enough to meet Ethiopia’s long-term needs with Ethiopia’s demand for refined fuels growing 10% a year.
The pipeline would bypass the congested port and road. The report quotes Demelash Alamaw, assistant to chief executive at EPSE, that it is inefficient to use fuel trucking fuel up from the coast. The project is expected to reduce the supply problem caused by truck shortages, as well as reduce the cost of transport.
Brian Herlihy, CEO and founder of Black Rhino, presented the proposal on 21 Nov at a meeting on “Powering Africa: Ethiopia Meeting,” at Radisson Blu Hotel, Addis Abeba, organized by UK-based company Energy Net Ltd.
He said the Ethiopian Government is studying the proposal and Djibouti is happy. If the Ethiopian Government gives a green light to the project the company will proceed to study the environmental and engineering condition of the construction,
Fortune reports that officials at the Ministry of Water, Irrigation & Energy (MoWIE), confirmed that the proposal had been submitted and they would look at it before deciding to discuss it further with other stakeholders, such as the Ministry of Finance & Economic Development (MoFED), the Ministry of Foreign Affairs (MoFA), and Ministry of Transport (MoT).