By Nworisa Michael
Dangote Industries Limited has signed a $4.2 billion, 25-year natural gas supply agreement with China’s GCL Group to power a major fertilizer production project in Ethiopia.
The landmark agreement, formalized in Lagos, is expected to support the development of a large-scale urea fertilizer plant being constructed by the Dangote Group in partnership with Ethiopian Investment Holdings (EIH).
Under the deal, GCL Group will provide a steady supply of natural gas to the planned three-million-tonne-per-year fertilizer facility, which is estimated to cost about $2.5 billion. The project is structured under a 60:40 equity partnership between Dangote Group and Ethiopian Investment Holdings and is expected to commence operations by 2029.
When completed, the facility is projected to become the largest modern fertilizer production hub in East Africa. It is expected to meet Ethiopia’s domestic demand for urea while also supplying fertilizer to neighbouring countries in the region.
The natural gas for the project will be sourced from the Calub Gas Field located in Ethiopia’s Ogaden Basin. It will be transported to the fertilizer complex in Gode, within the Somali Region, through a dedicated 108-kilometre pipeline.
President and Chief Executive of Dangote Industries Limited, Aliko Dangote, said the partnership represents a significant step toward strengthening Africa’s industrial capacity and reducing dependence on imported finished products.
According to him, the collaboration will integrate natural gas extraction with fertilizer production, creating a closed-loop value chain capable of improving food security and promoting industrial development across the continent.
Chairman of GCL Group, Zhu Gongshan, also expressed confidence in the partnership, noting that the project would expand opportunities in Ethiopia’s energy, chemical and agricultural sectors.
He said the cooperation combines GCL’s oil and gas operations in Ethiopia with Dangote Group’s industrial presence across Africa, creating broader service and market opportunities on the continent.
Industry analysts believe the project could transform East Africa’s fertilizer sector by reducing reliance on imports, boosting agricultural productivity and generating thousands of direct and indirect jobs.
They also note that the use of natural gas as a feedstock for fertilizer production aligns with global efforts toward cleaner and lower-carbon industrial processes.
Observers say the project represents a significant milestone in China–Africa industrial cooperation by linking resource development, pipeline transportation and fertilizer manufacturing into a single integrated value chain.
Founded by Africa’s richest businessman, Aliko Dangote, Dangote Group operates across several sectors including cement, food processing, energy and chemicals, and remains one of the continent’s largest industrial conglomerates.
