Ethiopia, Chinese Firm Ink Gas Commercialisation Deal

April 25 , 2020

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The Ministry of Mines & Petroleum and the Chinese POLY-GCL Petroleum Investment have signed a gas commercialisation agreement, which will ensure the planned fertiliser plant in Dire Dawa is supplied with ammonia. The agreement, which was signed on the premises of the Ministry on April 24, 2020, grants POLY-GCL the right to commercialise four trillion cubic feet of gas for both the local and international markets. Half of the gas will be supplied to the fertiliser plant, which Morocco’s Office Cherifien des Phosphates (OCP), the world’s largest phosphate exporter, and the state-run Chemical Industries Corporation agreed to build in Dire Dawa for 3.7 billion dollars. The agreement was signed four years ago. The remaining will be made available to the international market through a pipeline stretching from Ethiopia to Djibouti and later converted to liquified natural gas (LNG) at a natural gas processing plant to be built in Djibouti. POLY-GCL has been extracting natural gas at Calub, Hilala and Shilabo sites in the Ogaden area in the Somali Regional State. The plant is expected to convert 215 million cubic feet of natural gas to LNG daily. The project is expected to generate six billion dollars over 20 years. The area has a reserve of eight trillion cubic feet of gas.