Motuma Mekassa, Petroleum Minister said China Poly Group has plans to begin exporting natural gas from Ethiopia’s eastern Ogaden basin by mid-2019 as it continues to explore near the border with Somalia.
Shipments from the Hilala and Calub fields will be exported along with a 700-kilometer pipeline to a port complex being built in neighboring Djibouti, Motuma said in an interview in the capital, Addis Ababa.
Ethiopia the fastest growing economy for the past decade in Africa is developing gas finds to diversify it's $72.3 billion economies. The Horn of Africa nation plans to increase natural resources’ contribution to gross domestic product to 10 percent from 1.5 percent by 2025 when it expects to become a middle-income country with a gross national income per capita of $1,045 to $12,736.
POLY-GCL Petroleum Group signed five production-sharing agreements with Ethiopia’s Mines Ministry in 2013 to explore a 117,151 square-kilometer area in the Ogaden basin, according to Motuma.
According to Motuma, The China Development Bank is financing the project, At least 4.5 trillion cubic feet of gas has so far been discovered in the fields, he said, citing an analysis by POLY-GCL.
Djibouti has secured $4 billion in finance that will enable work on the project to start in Damerjog, north of the country’s border with Somalia, he said.
Vancouver-based Africa Oil Corp., Ethiopian based company Southwest Energy Ltd.and GBP Global Resources, a unit of Russia’s state-owned Gazprombank Group, are all exploring for oil and gas in Ethiopia, with feasibility studies underway in some areas, according to Motuma.
According to the government, Tenneco the US-based company first discovered Gas reserves in the Ogaden basin in 1972, which was expelled from the country five years later by a Marxist military junta known as the Derg. Soviet Petroleum Expedition and Exploration started exploring the reserves after Tenneco’s expulsion before its contract was terminated in 1994 after the Derg was toppled by the Ethiopian People’s Revolutionary Democratic Front, which has remained in power since then.