11 April 2018

Ethiopia Foresees U.S.$1 Billion From Gas Export

Photo: Premium Times
Gas pipeline.

Motuma Mekassa — Ministry of Mines, Natural Gas and Petroleum disclosed that the recently discovered natural gas in the Ogaden basin of Ethio-Somali State would enable the country to secure one billion USD in the first year of operation.

The Chinese firm Poly-GCL discovered 7-8 billion cubic trillion feet (TFC) of natural gas in Ogaden fields and the volume and quality of the gas asserted to be economically feasible, Minister Motuma Mekassa told The Ethiopian Herald.

The Minster noted that gas processing is a very expensive business to carry out locally and agreement was reached with the Chinese company to install a pipeline and transport the gas to Djibouti.

Motuma further stated that the firm would also build a Liquefied Natural Gas (LNG) plant in the Port of Djibouti to process the natural gas and export it to China.

He said: "We are expecting a one billion USD revenue from gas export in the first year of operation and anticipating the figure would rise in the subsequent years due to the huge reserve."

The Minister indicated that there is an ongoing negotiation between Poly-GCL and Djibouti's government in the construction of the pipeline and liquefied gas plant and the government of Ethiopia is persuading the two parties to reach the final deal.

Motuma, however, said the discovered natural gas is not fully meant to export, and it would provide sufficient supply to domestic consumption. He pointed out that the Morocco-based OCP Company, which plans to establish factory in Dire-Dawa, aims to use the gas. The gas discovery is a great phenomenon which is expected to make a meaningful contribution in sustaining country's rapid economic growth in years to come, the Minister stated.

"Ethiopia has witnessed non-oil driven economic growth over the past decade and plus years and the discovered gas is essential in diversifying the economy and enlarging natural resources contribution to the Gross Domestic Product," he explained.

According to the World Bank report, Ethiopia set a target to increase the current a 1.5 percent share of natural resources to the GDP to 10 percent by2025.

Apart from POLY-GCL, four foreign firms engaged in gas exploration in the Ogaden basin and a company known as New Age recently discovered 1.2 to 1.4 TFC of natural gas reserve in the area.

Ethiopia's natural gas prospect is not limited in Ogaden region and extensive exploration activities are carried out by local and foreign companies in the Rift Valley areas, Gambela, Afar and Amhara states, the Minister noted.

In Ethiopia, a U.S. company Tenneco pioneered the discovery of gas in 1972 in Ogaden basin and the Soviet Petroleum Exploration and Expedition made exploration activities during the reign of the Marxist government.

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