Dangote, China’s GCL Sign $4.2bn Gas Deal to Power Ethiopia Fertiliser Megaproject

Dangote, China’s GCL Sign $4.2bn Gas Deal to Power Ethiopia Fertiliser Megaproject

Dangote Industries Limited (DIL) has sealed a US$4.2 billion, 25‑year natural gas supply agreement with China’s GCL Group, marking one of the most significant China–Africa industrial partnerships in recent years. The deal will supply natural gas to Dangote Group’s upcoming 3‑million‑tonne-per-year urea fertiliser complex in Gode, Somali Region, Ethiopia, a project expected to transform East Africa’s fertiliser landscape.

The fertiliser plant, valued at US$2.5 billion, is being developed under a 60:40 equity partnership between Dangote Group and Ethiopian Investment Holdings (EIH). Scheduled to begin operations in 2029, it will become the largest modern fertiliser hub in East Africa, meeting Ethiopia’s current urea import demand while supplying neighbouring markets. Analysts say the project will reduce dependence on imports, strengthen regional food security, and support local industrial growth.

The natural gas required for the project will be sourced from the Calub Gas Field in Ethiopia’s Ogaden Basin and transported via a dedicated 108-kilometre pipeline directly to the fertiliser complex. This integrated approach links upstream gas extraction, midstream transport, and downstream fertiliser production, creating a closed-loop “gas-to-fertiliser” value chain.

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Speaking on the deal, Aliko Dangote, President and CEO of Dangote Industries, said: “Africa cannot continue exporting raw materials while importing finished products. Through strategic cooperation with GCL, we will achieve a seamless energy-to-food industrial chain, advancing Africa’s industrial autonomy and food security.”

Zhu Gongshan, Chairman of GCL Group, highlighted the partnership’s broader impact, noting that it will expand energy, chemical, and food security sectors in Ethiopia and advance a mutually beneficial industrial ecosystem. He also commended the Ethiopian government for facilitating the project.

Industry experts note that the project carries multiple strategic benefits. It is expected to create thousands of direct and indirect jobs, stimulate infrastructure development in the Somali Region, and support low-carbon industrialisation by using natural gas as feedstock. The initiative also aligns with broader continental goals of building integrated energy-to-food systems, leveraging local resources, and enhancing industrial value chains.

The partnership is also considered a flagship initiative under China’s Belt and Road framework, demonstrating how industrial cooperation can combine energy development with agricultural advancement to strengthen food security and regional economic resilience.

By integrating Chinese technological expertise with Africa’s resource endowment, the project sets a benchmark for large-scale, resource-driven industrial projects on the continent, positioning East Africa as a hub for modern fertiliser production and signalling a new era of Africa–China industrial collaboration.

Dangote, China’s GCL Sign $4.2bn Gas Deal to Power Ethiopia Fertiliser Megaproject