Dangote, GCL Seal $4.2bn Gas Deal to Power Ethiopia Fertiliser Project
Africa’s industrial expansion received a major boost as Dangote Group and China’s energy major GCL Group signed a 25-year natural gas supply agreement valued at about $4.2 billion to support a large scale fertiliser project in Ethiopia.
The agreement, signed in Lagos, will see GCL supply natural gas from the Calub Gas Field in Ethiopia’s Ogaden Basin to power Dangote’s planned urea fertiliser complex in the Somali Region. The facility, expected to begin operations in 2029, will have an annual production capacity of three million tonnes, making it the largest modern fertiliser plant in East Africa.
Under the arrangement, gas will be transported through a dedicated 108-kilometre pipeline to the fertiliser production base in Gode. The overall project is estimated to cost about $2.5 billion, with Dangote Group holding a 60 per cent equity stake while Ethiopian Investment Holdings will hold the remaining 40 per cent.
Founder of Dangote Group, Aliko Dangote, said the partnership reflects a broader strategy to deepen industrialisation across Africa by building value chains that link natural resources directly to manufacturing.
“Africa’s energy industry cannot continue exporting raw materials while importing finished products. Through strategic cooperation with GCL, we will create an efficient value chain from natural gas extraction to fertiliser production, strengthening Africa’s capacity to secure its own food supply,” he said.
Chairman of GCL Group, Zhu Gongshan, described the agreement as a milestone for China–Africa industrial cooperation, noting that the partnership would combine GCL’s energy infrastructure expertise with Dangote’s manufacturing footprint across the continent.
Analysts say the project could significantly reshape the fertiliser market in East Africa, where countries currently rely heavily on imports to meet agricultural demand. Once operational, the plant will be capable of meeting Ethiopia’s entire domestic demand for urea while supplying neighbouring markets.
Beyond fertiliser production, the project is also expected to stimulate economic activity in Ethiopia’s Somali Region by creating thousands of jobs, expanding infrastructure and strengthening the country’s energy sector.
Industry observers note that the integrated model linking upstream gas production, pipeline transportation and downstream fertiliser manufacturing represents a new template for large scale China–Africa industrial cooperation, while also aligning with global efforts to promote lower carbon industrial production using natural gas as a feedstock.
The project is widely viewed as a major step toward improving food security and industrial self reliance across East Africa, while reinforcing the strategic economic ties between African and Chinese enterprises.
