The Djibouti Ports and Free Zones Authority (DPFZA) has announced that it is awaiting Ethiopia’s participation and financial commitment in the upcoming budget year to commence construction of an oil storage depot at the new Damerjog Liquid Bulk Port (DLBP), located in the southeastern part of the country near the border with Somaliland.
While the construction of the port’s ultra-modern offshore jetty is currently in its final stages, the facility requires the completion of the large-scale onshore storage depot before it can begin operations in the near future.
Aboubaker Hadi Omar, chairman of the DPFZA, told Capital newspaper at his office in Djibouti City that the authority is expecting the Ethiopian government to provide the necessary financing for the fuel intake terminal, which is situated about 13 kilometers from the Ethio-Djibouti railway network.
“We are discussing with the Ethiopian government’s investment arm, Ethiopian Investment Holdings (EIH) — one of the continent’s leading sovereign wealth funds (SWF),” the chairman said. Noting that EIH intends to invest in the storage farm, Hadi expressed hope that the fund would secure the financing by the start of the new budget year on July 8.
When asked when the new jetty—which will serve as an alternative to the existing Doraleh oil terminal west of Djibouti—would be inaugurated, the chairman replied, “We have to build the storage first; the Ethiopian side is expected to come forward with that in the near future.” According to reports from late 2022, EIH is expected to acquire a stake in the project through the Ethiopian Petroleum Supply Enterprise (EPSE), one of the major public companies under the sovereign wealth fund’s ownership.
Currently, Ethiopia relies almost exclusively on the Dubai Emirates National Oil Company’s Horizon Djibouti Terminal (HDTL), located near Doraleh, for its energy imports. This terminal has an annual capacity of 4.5 million tons, which is widely considered insufficient to meet Ethiopia’s rapidly growing fuel demand.
In contrast, the new Damerjog (DLBP) oil jetty will have an annual capacity of 25 million tons and will be capable of supporting up to 12 vessel rotations. The port will serve multiple storage terminals with a combined static storage capacity of approximately two million cubic meters, providing a major logistics relief for Ethiopia’s expanding energy needs.
During a recent meeting of the Ethio-Djibouti Joint Railway Commission (JRC), officials discussed the Djibouti Damerjog Industrial Development (DDID) project, with Ethiopian officials emphasizing that this port is critical to meeting the country’s fuel demand.
As part of the rail expansion, the Ethio-Djibouti Railway (EDR) plans to build a 17-kilometer line connecting the Damerjog oil terminal to the Nagad Railway Station in Djibouti, enabling direct fuel transport to Ethiopia. The capital expenditure for this rail connection is estimated at $90 million.
Furthermore, EIH CEO Brook Taye met with Djibouti President Ismail Omar Guelleh last week to discuss a cross-border pipeline project. This plan is envisioned for implementation through a strategic partnership with the renowned Nigerian conglomerate, Dangote Group. The first phase involves installing a pipeline for refined petroleum products from the Port of Djibouti to the Ethiopian border town of Dawaleh. The second phase will entail establishing gas and oil pipelines to export Ethiopian natural gas and crude oil from fields in Ethiopia’s Somali region to external markets via the Djibouti corridor.
