By Francis Ajuonuma
Dangote Industries Limited has signed a $4.2 billion, 25-year natural gas supply agreement with China’s GCL Group to power a major fertiliser production project in Ethiopia, deepening industrial cooperation between Africa and China.
The agreement, formalised in Lagos, will support Dangote Group’s planned 3 million-tonne-per-year urea fertiliser plant in Ethiopia. The $2.5 billion facility is being developed in partnership with Ethiopian Investment Holdings under a 60:40 equity structure, with production expected to commence in 2029.
Industry analysts say the deal marks one of the largest energy supply arrangements linked to fertiliser production in East Africa, positioning Ethiopia as a major regional supplier while reducing its dependence on imported fertilisers.
Under the arrangement, GCL will supply natural gas from the Calub Gas Field in Ethiopia’s Ogaden Basin, which will be transported via a 108-kilometre dedicated pipeline to the fertiliser complex in Gode, in the Somali Region.
President and Chief Executive of Dangote Industries Limited, Aliko Dangote, said the partnership reflects a strategic shift toward industrial self-reliance on the continent.
“Africa’s energy industry cannot continue indefinitely exporting raw materials while importing finished products,” Dangote said.
“Through seamless integration and strategic cooperation with GCL, we will achieve an efficient closed-loop value chain from natural gas extraction to fertiliser production.”
Dangote added that the project represents “a crucial step toward enabling Africa to secure greater autonomy over its food security.”
Chairman of GCL Group, Zhu Gongshan, said the collaboration would expand industrial development opportunities in Ethiopia and across Africa.
“This cooperation will enable both sides to expand new frontiers in Ethiopia’s energy, chemical and food security sectors,” he said.
“Leveraging GCL’s integrated oil and gas operations and Dangote Group’s extensive industrial footprint across Africa will significantly enhance our service capabilities and market reach across the continent.”
Once operational, the fertiliser complex is expected to fully meet Ethiopia’s domestic urea demand while supplying neighbouring markets across East Africa.
Analysts say the integrated structure linking gas production, pipeline infrastructure, and fertiliser manufacturing could create thousands of jobs, stimulate infrastructure development in Ethiopia’s Somali Region, and strengthen the region’s agricultural value chain.
The project also aligns with broader efforts to develop energy-to-food industrial corridors in Africa, using natural gas as a feedstock for cleaner chemical production while supporting food security across the continent.
