A $4.2 billion gas deal aimed to power a fertiliser project in Ethiopia has been signed between Nigeria’s Dangote Industries Limited and China’s GCL Group.
The Chinese firm is expected to supply stable natural gas to Dangote Group’s upcoming 3‑million‑tonne‑per‑year urea fertiliser production complex in Ethiopia for 25 years.
The natural gas supplied by GCL will be sourced from the Calub Gas Field in Ethiopia’s Ogaden Basin and delivered via a dedicated 108‑kilometre pipeline directly to the Dangote fertiliser complex in Gode, Somali Region.
The initiative aligns with Africa’s broader objective of establishing an integrated energy‑to‑food value chain, leveraging local resources to drive industrial autonomy.
The fertiliser plant, valued at $2.5 billion, is being developed under a 60:40 equity structure between Dangote Group and Ethiopian Investment Holdings (EIH), respectively, and is scheduled to begin operations in 2029.
Once commissioned, it will become East Africa’s largest modern fertiliser production hub, fully meeting Ethiopia’s current urea import demand while supplying neighbouring regional markets.
The project is expected to significantly reshape East Africa’s fertiliser landscape, reducing reliance on imports and strengthening agricultural self‑sufficiency.
“Africa’s energy industry cannot continue indefinitely exporting raw materials while importing finished products. We must pursue a new path of highly autonomous development.
“Through seamless integration and strategic cooperation with GCL, we will achieve an efficient closed‑loop value chain from natural gas extraction to fertiliser production, taking a crucial step toward enabling Africa to secure greater autonomy over its food security,” Mr Aliko Dangote said at the signing ceremony in Lagos.
The Chairman of GCL Group, Mr Zhu Gongshan, also reaffirmed the company’s confidence in the partnership, noting that the agreement was made possible through the facilitation and support of the Ethiopian government.
“This cooperation will enable both sides to expand new frontiers in Ethiopia’s energy, chemical, and food security sectors while transitioning from a business going global model toward a mutually beneficial ecosystem‑based framework.
“Leveraging GCL’s integrated oil and gas operations in Ethiopia and Dangote Group’s extensive industrial footprint across Africa, the partnership will significantly enhance our service capabilities and market reach across the continent.”