Sunday October 5, 2025
CALUB, Somali Region — Ethiopian Prime Minister Abiy Ahmed delivers remarks during the inauguration of the first phase of the Ogaden Liquefied Natural Gas (LNG) Project at the Calub gas field on Oct. 2, 2025. The facility, part of Ethiopia’s $10 billion industrial investment drive in the Somali Region, marks a major step toward domestic energy production following the government’s decision to cancel earlier export pipeline plans.
Addis Ababa (HOL) — Ethiopia has inaugurated the first phase of its long-delayed Ogaden Liquefied Natural Gas (LNG) Project, a cornerstone of its plan to harness domestic natural gas for power generation and industrial growth after abandoning earlier export ambitions.
Prime Minister Abiy Ahmed led the ceremony in Calub, unveiling what he called a landmark in Ethiopia’s industrial transformation. The facility, located in the gas-rich Ogaden Basin, is set to produce 111 million liters of LNG annually, with a second phase under construction expected to expand output to 1.3 billion liters per year.
“This is a cornerstone of our economic independence — supporting agriculture, energy security, and technological advancement,” Abiy said.
The Ogaden LNG project represents a major realignment in Ethiopia’s energy strategy. Earlier plans envisioned a 767-kilometer pipeline to Djibouti and a Red Sea export terminal, but those efforts were cancelled in 2025 amid financing shortfalls and a policy shift prioritizing domestic use.
Officials say the Calub complex will supply up to 1,000 megawatts of power to Ethiopia’s national grid and emerging high-demand industries such as data centers and cryptocurrency mining. It will also serve as feedstock for fertilizer and petrochemical plants, central to Abiy’s drive for food and energy sovereignty.
The project anchors a $10 billion investment plan across the Somali Region, funding transmission lines, road corridors, and industrial zones intended to integrate one of Ethiopia’s least-developed regions into its national economy.
Discovered in the 1970s, Calub and nearby Hilala fields remained idle for decades due to insecurity and lack of infrastructure. In 2013, Ethiopia awarded Chinese firm Poly-GCL Petroleum Group development rights under a production-sharing agreement.
Although a pipeline and LNG terminal deal was signed in 2019, implementation lagged. By mid-2025, the government scrapped the export model entirely, citing financial risks and supply security needs.
Energy analysts say the new direction reflects Ethiopia’s push for import substitution and industrial diversification, aligning with its “Homegrown Economic Reform” blueprint.
The project’s launch is being celebrated as an economic milestone for the Somali Region, historically marginalized despite its resource potential. Local leaders view it as a chance to spur jobs, private investment, and infrastructure.
Still, observers caution that key operational details remain undisclosed, including final production capacity, financing arrangements, and environmental safeguards.
Without greater transparency, they warn, the project’s long-term impact may remain uncertain despite its symbolic significance.