Dangote Industries Limited has entered into a landmark US $4.2bn agreement with China’s GCL Group to supply natural gas for its major industrial expansion in Ethiopia, marking a significant step in Africa’s push toward energy-driven industrialization.
At the heart of the deal is a 25-year gas supply arrangement that will fuel a planned three-million-tonne-per-year urea fertiliser complex. The project, valued at US $2.5bn, is being developed through a joint venture between Dangote Group and Ethiopian Investment Holdings, with a 60:40 equity split. Production at the facility is expected to begin in 2029.
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Africa’s goals
The gas will be sourced from the Calub Gas Field in Ethiopia’s Ogaden Basin and transported via a dedicated 108-kilometre pipeline to the fertiliser plant located in Gode, within the Somali Region. This integrated setup is designed to create a direct link between upstream gas extraction and downstream fertiliser production.
Strategically, the project aligns with broader African ambitions to build self-sufficient industrial ecosystems by utilising local natural resources. By converting domestic gas into fertiliser, the initiative is expected to reduce dependence on imports, stabilise fertiliser supply, and support agricultural productivity across East Africa.
Aliko Dangote, President and CEO of Dangote Industries, emphasised that the partnership reflects a shift away from exporting raw materials toward developing complete value chains within the continent. He highlighted the importance of integrating energy and agriculture to strengthen food security and economic independence.
Meanwhile, Zhu Gongshan, Chairman of GCL Group, underscored the role of the Ethiopian government in facilitating the agreement. He noted that the collaboration combines GCL’s expertise in energy development with Dangote’s industrial footprint, creating a platform to expand operations across Africa’s energy, chemicals, and food sectors. Overall, the deal represents a major milestone in linking Africa’s natural gas resources to industrial and agricultural development, reinforcing a model where energy infrastructure directly supports food production and economic resilience.
