Dangote, Chinese Energy Firm Sign $4.2bn Gas Deal For Ethiopia Fertiliser Plant

Dangote Industries Limited (DIL) and GCL Group, China’s leading private energy conglomerate, have formalised a landmark $4.2 billion, 25‑year natural gas supply agreement to power Dangote Group’s major expansion projects in Ethiopia.

The agreement, signed in Lagos, reinforces one of the most significant China–Africa industrial partnerships to date.

Under the long‑term arrangement, GCL Group will supply stable natural gas to Dangote Group’s upcoming 3‑million‑tonne‑per‑year urea fertiliser production complex in Ethiopia. The plant, valued at $2.5 billion, is being developed under a 60:40 equity structure between Dangote Group and Ethiopian Investment Holdings (EIH), respectively, and is scheduled to begin operations in 2029.

Once commissioned, the facility will become East Africa’s largest modern fertiliser production hub, fully meeting Ethiopia’s current urea import demand while supplying neighbouring regional markets. The project is expected to significantly reshape East Africa’s fertiliser landscape, reducing reliance on imports and strengthening agricultural self‑sufficiency.

The natural gas supplied by GCL will be sourced from the Calub Gas Field in Ethiopia’s Ogaden Basin and delivered via a dedicated 108‑kilometre pipeline directly to the Dangote fertiliser complex in Gode, Somali Region. The initiative aligns with Africa’s broader objective of establishing an integrated energy‑to‑food value chain, leveraging local resources to drive industrial autonomy.

Describing the significance of the collaboration, president/chief executive of Dangote Industries Limited, Aliko Dangote said, “Africa’s energy industry cannot continue indefinitely exporting raw materials while importing finished products. We must pursue a new path of highly autonomous development. Through seamless integration and strategic cooperation with GCL, we will achieve an efficient closed‑loop value chain from natural gas extraction to fertiliser production, taking a crucial step toward enabling Africa to secure greater autonomy over its food security.”

Chairman of GCL Group, Mr Zhu Gongshan, reaffirmed the company’s confidence in the partnership, noting that the agreement was made possible through the facilitation and support of the Ethiopian government:

“This cooperation will enable both sides to expand new frontiers in Ethiopia’s energy, chemical, and food security sectors while transitioning from a ‘business going global’ model toward a mutually beneficial ecosystem‑based framework. Leveraging GCL’s integrated oil and gas operations in Ethiopia and Dangote Group’s extensive industrial footprint across Africa, the partnership will significantly enhance our service capabilities and market reach across the continent,” he stated.

The strategic collaboration marks a historic step in Africa–China industrial cooperation and is expected to catalyse long‑term economic transformation across East Africa.

Industry analysts noted that “this project conveys multiple strategic values. Once operational, it will not only help Ethiopia achieve full self-sufficiency in its fertiliser industry but will also unlock the industrial potential of the Somali Region, create thousands of direct and indirect employment opportunities, and drive the high-quality development of regional infrastructure and supporting service industries.”