Aliko Dangote Seals $4.2bn Gas Deal with GCL Group to Power Ethiopia Fertilizer Megaproject

Aliko Dangote Seals $4.2bn Gas Deal with GCL Group to Power Ethiopia Fertilizer Megaproject

Dangote Industries Limited has signed a $4.2 billion, 25-year natural gas supply agreement with China’s GCL Group to support a major fertilizer production project in Ethiopia, marking one of the largest China–Africa industrial partnerships aimed at boosting agricultural self-sufficiency in East Africa.

The landmark agreement, formalised in Lagos, will see GCL Group supply natural gas to Dangote Group’s planned three-million-tonne-per-year urea fertilizer complex in Ethiopia.

The $2.5 billion fertilizer facility is being developed under a 60:40 equity partnership between Dangote Group and Ethiopian Investment Holdings and is expected to commence operations in 2029.

When completed, the plant will become the largest modern fertilizer production hub in East Africa, fully meeting Ethiopia’s current urea import demand while supplying neighbouring markets across the region.

Natural gas for the project will be sourced from the Calub Gas Field and transported through a dedicated 108-kilometre pipeline to the fertilizer complex located in Gode in Ethiopia’s Somali Region.

President and Chief Executive of Dangote Industries Limited, Aliko Dangote, said the partnership reflects Africa’s push to industrialise its natural resources rather than exporting them in raw form.

“Africa’s energy industry cannot continue indefinitely exporting raw materials while importing finished products. Through strategic cooperation with GCL, we aim to establish an integrated value chain from natural gas extraction to fertilizer production,” he said, noting that the project will strengthen the continent’s food security.

Chairman of GCL Group, Zhu Gongshan, also expressed confidence in the collaboration, stating that the agreement will expand industrial development in Ethiopia’s energy, chemical and agricultural sectors.

According to him, the partnership leverages GCL’s oil and gas operations in Ethiopia and Dangote Group’s industrial footprint across Africa to create a mutually beneficial ecosystem capable of serving markets across the continent.

Industry analysts say the project could significantly transform East Africa’s fertilizer sector by reducing reliance on imports, unlocking industrial potential in the Somali Region and creating thousands of direct and indirect jobs.

Beyond economic benefits, the gas-based fertilizer production process is also expected to support global low-carbon transition efforts by providing a cleaner chemical production pathway compared with other industrial feedstocks.

The project integrates upstream gas development, pipeline transportation and downstream fertilizer production into a single “gas-to-fertilizer” value chain, combining Chinese technology with Africa’s natural resource base.

Observers say the initiative also aligns with China’s Belt and Road Initiative by linking energy development with agricultural productivity to support long-term economic growth in Ethiopia and the wider African region.

Dangote Group, founded by Africa’s richest businessman, Aliko Dangote, operates across several sectors including cement, food processing, energy and chemicals, and continues to expand its industrial investments across the continent.