Dangote seals $4.2bn gas deal with China’s GCL to power

Dangote Industries Limited (DIL) has sealed a key $4.2 billion, 25-year natural gas supply agreement with China’s GCL Group to power its fertiliser expansion in Ethiopia, marking one of the most significant China–Africa industrial partnerships to date.

The deal, signed in Lagos, will supply stable natural gas to Dangote Group’s upcoming 3‑million‑tonne‑per‑year urea fertilizer complex in Gode, Somali Region.

The fertiliser plant, valued at $2.5 billion, is being developed under a 60:40 equity structure between Dangote Group and Ethiopian Investment Holdings (EIH), and is slated to begin operations in 2029. Once operational, the facility will be East Africa’s largest modern fertiliser hub, meeting Ethiopia’s current urea import demand while supplying neighbouring regional markets. The project is expected to reshape the region’s fertilizer landscape, reduce reliance on imports, and enhance agricultural self-sufficiency.

The natural gas required for the project will be sourced from the Calub Gas Field in Ethiopia’s Ogaden Basin and delivered via a dedicated 108-kilometre pipeline directly to the fertilizer complex.

The initiative aligns with Africa’s greater objective of creating an integrated energy-to-food value chain, leveraging local resources to drive industrial autonomy.

Speaking on the significance of the partnership, Aliko Dangote, President and Chief Executive Officer of Dangote Industries Limited, said: “Africa’s energy industry cannot continue indefinitely exporting raw materials while importing finished products.

We must pursue a new path of highly autonomous development. Through seamless integration and strategic cooperation with GCL, we will achieve an efficient closed-loop value chain from natural gas extraction to fertilizer production, taking a crucial step toward enabling Africa to secure greater autonomy over its food security.”

Mr. Zhu Gongshan, Chairman of GCL Group, reaffirmed the company’s confidence in the partnership, highlighting the Ethiopian government’s facilitation: “This cooperation will enable both sides to expand new frontiers in Ethiopia’s energy, chemical, and food security sectors while transitioning from a ‘business going global’ model toward a mutually beneficial ecosystem-based framework. Leveraging GCL’s integrated oil and gas operations in Ethiopia and Dangote Group’s extensive industrial footprint across Africa, the partnership will significantly enhance our service capabilities and market reach across the continent.”

The agreement marks a historic milestone in China–Africa industrial cooperation and is expected to catalyse long-term economic transformation in East Africa. GCL will leverage its “gas–power–computing” industrial model and Chinese technological solutions in synergy with Africa’s development needs, deepening industrial and energy integration in the region. Both parties credited the Ethiopian government for strong leadership and support in bringing the project to fruition.

Over the past two decades, GCL has evolved in Ethiopia from oil and gas exploration to developing the country’s first natural gas liquefaction project and advancing integrated industrial strategies, earning high trust from senior government leadership.

Industry analysts note the project carries multiple strategic benefits. It will enable Ethiopia to achieve fertiliser self-sufficiency, stimulate industrial growth in the Somali Region, create thousands of direct and indirect jobs, and advance regional infrastructure development. Additionally, by producing fertilizer using natural gas as feedstock, the project supports a low-carbon development pathway and aligns with global green industrial trends.

By integrating upstream gas extraction, midstream pipeline transport and downstream fertilizer production, the project forms a complete closed-loop “gas-to-fertiliser” industrial chain, combining Chinese technological strengths with Africa’s resource endowments.

As a flagship initiative under the Belt and Road framework, the project demonstrates the synergy between energy development and agricultural advancement, helping Ethiopia and the wider African region move toward energy independence, industrial revitalization, and food self-sufficiency.

The choice of GCL Group as a strategic partner highlights the recognition of Chinese technological expertise and local operational experience by Africa’s leading industrial enterprises.

This historic deal positions East Africa as a hub for modern fertilizer production and signals a new era of industrial collaboration between Africa and China, setting a benchmark for future large-scale, resource-driven development projects across the continent.