Dangote Signs $4.2 Billion Natural Gas Agreement with Xinte Group to Support Ethiopia Fertilizer Project

News Report (Reporter Yuan Chuanxi)

Africa’s industrialization process is gaining significant momentum. Recently, Dangote Group of Nigeria and China’s GCL Group (hereinafter referred to as “GCL Group”) signed a 25-year natural gas supply agreement valued at approximately $4.2 billion to support a large-scale fertilizer production project in Ethiopia.

The agreement was signed in Lagos, Nigeria. Under the terms, GCL Group will utilize natural gas resources from the Calub gas field in the Ogaden Basin to provide energy for Dangote Group’s planned urea fertilizer complex in Somali State. The project is expected to start operations in 2029 with an annual capacity of 3 million tons, making it the largest modern fertilizer production base in East Africa upon completion.

According to the agreement, natural gas will be transported via a dedicated pipeline approximately 108 kilometers long to the fertilizer production facility in Gode. The total investment in the project is estimated at around $2.5 billion, with Dangote Group holding a 60% stake and Ethiopia Investment Holdings (EIH) holding 40%.

GCL Group Chairman Zhu Gongshan stated that this agreement marks an important milestone in China-Africa industrial cooperation. The partnership will combine GCL Group’s expertise in energy infrastructure with Dangote Group’s extensive manufacturing presence across Africa.

Industry analysts believe that this project could significantly impact the fertilizer market landscape in East Africa. Currently, many countries in the region rely heavily on fertilizer imports to meet agricultural needs. Once operational, the project will be capable of satisfying Ethiopia’s entire domestic urea demand and provide stable supplies to neighboring markets.

Beyond fertilizer production, the project is expected to create thousands of jobs, improve infrastructure, and enhance the development of the energy sector, thereby boosting the economy of Somali State and further advancing Ethiopia’s energy industry.

Industry insiders note that integrating upstream natural gas extraction, midstream pipeline transportation, and downstream fertilizer production offers a new model for large-scale China-Africa industrial cooperation. It also aligns with the global trend of promoting low-carbon industrial production using natural gas as a raw material.

This project is widely regarded as a key initiative to enhance food security and industrial self-sufficiency in East Africa, while also strengthening strategic economic partnerships between African and Chinese enterprises.

(Edited by Zhang Wei)