Dangote’s $4.2bn Gas Deal Power Ethiopia Fertilizer Project

Nigerian industrial titan Aliko Dangote has clinched a landmark $4.2 billion, 25-year natural gas supply agreement with China’s leading energy giant, GCL Group, to fuel his massive urea fertiliser project in Ethiopia.

The pact, formalised in Lagos, ranks among the biggest China-Africa industrial tie-ups in recent times and will deliver steady natural gas feedstock to Dangote’s planned 3-million-tonne-per-year urea fertiliser complex – a $2.5 billion facility set to kick off operations in 2029.

Developed in partnership with Ethiopian Investment Holdings under a 60-40 equity split, the plant will emerge as East Africa’s largest modern fertiliser production hub. It is expected to slash Ethiopia’s heavy reliance on imported urea, serve neighbouring markets, and supercharge regional agricultural output.

Gas for the project will come from the Calub Gas Field in Ethiopia’s Ogaden Basin. GCL will transport it through a dedicated 108-kilometre pipeline straight to the facility sited in Gode, Somali Region.

Speaking after the signing, Dangote Industries Limited President and CEO Aliko Dangote declared: “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.”

GCL Group Chairman Zhu Gongshan added: “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.”

Industry watchers say the initiative will transform the Somali Region, generate thousands of direct and indirect jobs, boost infrastructure, and unlock fresh economic opportunities. The gas-to-fertiliser value chain also aligns with global low-carbon targets while strengthening Ethiopia’s push for energy and food independence.

With GCL already active in Ethiopia for over two decades – from exploration to building the country’s first gas liquefaction plant – the deal further cements growing Sino-African industrial cooperation under frameworks like the Belt and Road Initiative.

For Nigeria and the broader continent, the project stands as another proud testament to Dangote’s vision of value-added industries that stop raw material exports and build real self-reliance.