Dangote Secures $4.2 Billion, 25-Year Gas Supply Deal with China's GCL Group to Fuel Major Ethiopian Fertilizer Plant

 

In a major boost to industrial collaboration between Africa and China, Dangote Industries Limited (DIL), Africa's largest conglomerate, has signed a landmark US$4.2 billion natural gas supply agreement with China's Golden Concord Group Ltd. (GCL Group), a leading private energy firm.

The 25-year deal, formalized in Lagos, will provide a stable and long-term supply of natural gas to power Dangote Group's ambitious 3-million-tonne-per-year urea fertilizer production complex in Ethiopia. This facility, located in Gode in the Somali Region, is part of a broader $2.5 billion joint venture between Dangote Group (60% stake) and Ethiopian Investment Holdings (40% stake), aimed at transforming Ethiopia into a key fertilizer producer in East Africa.

Under the agreement, GCL Group will extract and deliver natural gas primarily from Ethiopia's Calub gas field in the Ogaden Basin. The gas will be transported via a dedicated 108-kilometer pipeline directly to the fertilizer plant, ensuring reliable feedstock for urea production. GCL anticipates producing around 1.33 billion liters of the energy resource annually by 2029, supporting the plant's operational needs and contributing to regional energy security.

The partnership underscores deepening China-Africa industrial ties, with the project expected to enhance Africa's capacity for self-sufficiency in food production by reducing reliance on imported fertilizers. The fertilizer complex is targeted for completion within the coming years (aligned with the original 40-month timeline from the 2025 shareholders' agreement), positioning Ethiopia to shift from a major fertilizer importer to a potential exporter.

A statement from the Dangote Group highlighted the strategic importance: “Through strategic cooperation with GCL, we will create an efficient value chain from natural gas extraction to fertilizer production, strengthening Africa’s capacity to secure its own food supply.”

This deal builds on earlier agreements, including the 2025 pact between Dangote and the Ethiopian government to develop the world-class urea facility, complete with pipelines, storage, logistics, and export infrastructure drawing from Ethiopia's Hilal and Calub reserves.

The initiative is poised to create thousands of jobs during construction and long-term employment in operations, while advancing Ethiopia's industrialization goals and Dangote's pan-African expansion strategy.