President of Djibouti, Ismaïl Omar Guelleh, laid the foundation stone for a new mega-gas project for the export of Ethiopian gas, comprising a natural gas pipeline, a liquefaction plant and an export terminal at Damerjog in Djibouti, Star Africa reported. The project will cost approximately $4b and it will transport up to 12bm3/y of natural gas from Ethiopia to Djibouti.

The new 700 km pipeline will enable Ethiopia to export gas further to China and support socio-economic development across the region. The liquefaction plant will have capacity to produce up to 10m tons of LNG per year after the completion of the project, Energy Global reported.

This mega gas project will become the second major joint energy infrastructure project between the Republic of Djibouti and Ethiopia. It will be funded by Chinese firm POLY-GCL Petroleum Group Holdings Ltd. Construction work is expected to start shortly and will take three years to complete.

In September 2015, Republic of Djibouti and Ethiopia signed a $1.5b agreement to construct a 550 km refined petroleum products pipeline linking Djibouti’s ports to the Awash terminal in central Ethiopia. Scheduled for completion in 2018, the petroleum pipeline will be built by Black Rhino Group and Mining Oil & Gas Services.