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Addis-Djibouti pipeline threatens the Lapsset

Friday, October 02, 2015

Ethiopian Prime Minister Meles Zenawi, President Mwai Kibaki and South Sudan?s President Salva Kiir during the launch of the Lapsset project in Lamu on March 2, 2012. Below, a map showing Djibouti and Ethiopia?s capital Addis Ababa.

Kenya’s much-touted Lapsset corridor may be overshadowed as Ethiopia, one of the key partners in the flagship project, seeks more collaboration with Djibouti.

The two Horn of Africa countries signed a Sh155 billion 550-km diesel, gasoline and jet fuel pipeline from port access in Djibouti to central Ethiopia.

The project, known as the Horn of Africa Pipeline, includes a 950,000 barrels storage facility in Damerjog, Djibouti, linked to a storage terminal in Awash, Ethiopia.

This technically casts a shadows on Lamu Port Southern Sudan-Ethiopia Transport Corridor, one of Kenya’s transformative flagship project.

Djibouti’s President Ismail Guelleh and Ethiopian Prime Minister Hailemariam Desalegn led the groundbreaking ceremony on Tuesday.

The project is financed and built by China.

This comes as Ugandan firms are seeking cooperation with Tanzania for alternative pipeline route to Mombasa port, even with the recent much-publicised agreements between Yoweri Museveni and Uhuru Kenyatta.

Oil companies believe this route is cheaper and offers better commercial terms.

This may steal the thunder from Lapsset, with fears Addis Ababa may now shift focus to its northern neighbour, Djibouti.

Once complete, the Ethiopia-Djibouti pipeline will transport 240,000 barrels of fuel a day.

The concession period after commercial operations begin is 30 years.

Lapsset seeks to provide a gateway through Kenya to Ethiopia, Uganda and Rwanda, which are landlocked.

The Ethiopia-Djibouti corridor seeks to be the logistics hub of the continent in the long-term, but more importantly for the wider Eastern and Central Africa. It is not clear what jolted Ethiopia to shift its focus from Kenya.

Lapsset has faced challenges, including corruption allegations in the tendering process and security problems posed by Somalia-based al Shabaab militants.

The South Sudan conflict pitting President Salva Kiir against his former deputy Riek Machar has also hurt the project.It is not clear if the Djibouti-Ethiopia pipeline will affect Addis Ababa’s interest in Lapsset.

In all likelihood, it will be completed as it is not affected by Somalia and South Sudan instability.


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