By: OrePulse

Djibouti and Ethiopia broke ground on a $160 million petroleum storage terminal on September 24, with leaders from both countries jointly laying the foundation stone at a ceremony meant to showcase deepening energy ties between the neighbors.

Djiboutian President Ismaïl Omar Guelleh and Ethiopian Prime Minister Abiy Ahmed laid the stone together at the Damerjog Industrial Park, referred to locally by the abbreviation DDIP, marking the formal start of construction on a facility developed jointly by the Dangote Group, led by Aliko Dangote, and Ethiopian Investment Holdings, known by the abbreviation EIH.

The terminal will occupy roughly 80 hectares within the industrial park and is designed to hold 375,000 cubic meters of petroleum products, with the capacity to move up to 5 million tons of fuel through the site each year. Once operational, it will connect directly to the Damerjog-Nagad railway line and to the nearby Damerjog Liquid Bulk Port through a shared collector system, tying the storage site into the wider transport network already serving the port complex.

For Djibouti, the project is expected to generate construction and operating jobs, create openings for local businesses to supply services to the terminal, and reinforce the country's position as a logistics and energy hub for the surrounding region. For Ethiopia, which has no coastline, the terminal offers an alternative to moving fuel overland by truck. This shift, backers say, should lower shipping and handling costs, ease pressure on regional highway traffic, and shrink the carbon footprint of fuel deliveries, while giving the country a steadier, longer-term supply of petroleum products.

The groundbreaking is also tied to a larger infrastructure plan still ahead: a proposed 120-kilometer pipeline that would eventually run from the Damerjog site to Dawanleh, a town further east inside Ethiopia, carrying several types of petroleum products and extending the terminal's reach well beyond the immediate port area to keep supplies flowing steadily further inland.

The project pairs Dangote Group's industrial and logistics interests with Ethiopian Investment Holdings' role as the site's co-developer. The joint appearance by Guelleh and Abiy at the groundbreaking underscored the political weight both governments are placing on the Djibouti-Ethiopia corridor as a channel for the fuel supplies the landlocked country depends on.

The Damerjog terminal adds a large-scale petroleum storage and distribution asset to Djibouti's stated ambition of functioning as a regional logistics and energy hub, while giving Ethiopian planners a direct stake in infrastructure that serves the country's energy security. The scale of the planned throughput, up to 5 million tons a year, would make the terminal one of the larger dedicated petroleum storage sites serving the corridor once it is completed, though how quickly it reaches that capacity will depend on how fast the accompanying rail and port links are brought into full use.

Neither the Dangote Group nor Ethiopian Investment Holdings detailed the financing structure behind the $160 million project, including what portion, if any, will be carried as debt versus equity contributed directly by the two partners.

The rail and port links built into the design are central to how the terminal is meant to function. Rather than standing as an isolated storage site, the facility is designed to move fuel on and off through the Damerjog-Nagad line and the shared collector system connecting it to the Liquid Bulk Port, so that imported petroleum products can pass through the terminal and onward into the distribution network serving both countries. That integration, along with the scale of the planned storage and annual throughput, is what officials in Djibouti and Ethiopia are pointing to as the terminal's main value, ahead of any details on financing, construction scheduling, or the eventual pipeline extension into eastern Ethiopia.