Dangote Industries Limited (DIL) and GCL Group, China’s leading private energy conglomerate, have formalized a landmark US$4.2 billion, 25 year natural gas supply agreement to power Dangote Group’s major expansion projects in Ethiopia.
According to a statement issued late on Monday, the agreement, which was signed in Lagos, reinforces one of the most significant China–Africa industrial partnerships to date.
The statement said under the long-term arrangement, GCL Group would supply stable natural gas to Dangote Group’s upcoming 3 million tonne per year urea fertilizer production complex in Ethiopia.
It revealed that the plant, valued at US$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.
The statement said once commissioned, the facility would become East Africa’s largest modern fertilizer production hub, fully meet Ethiopia’s current urea import demand while supplying neighbouring regional markets.
It said the project is expected to significantly reshape East Africa’s fertilizer 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 fertilizer 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,” the statement added.
It said while describing the significance of the collaboration, Aliko Dangote, President/Chief Executive of Dangote Industries Limited, 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 fertilizer production, taking a crucial step toward enabling Africa to secure greater autonomy over its food security.”
Chairman of GCL Group, Mr. Zhu Gongshan, also 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.”
The strategic collaboration marks a historic step in Africa–China industrial cooperation and is expected to catalyse long term economic transformation across East Africa.
