Dangote seals $4.2b gas deal with China’s GCL Group

Dangote Industries Limited (DIL) and GCL Group, China’s leading private energy conglomerate, have formalised a $4.2 billion, 25 year natural gas supply agreement to power Dangote Group’s major expansion projects in Ethiopia.

The agreement, signed in Lagos, reinforces one of the most significant China–Africa industrial partnerships to date.

Under the long term arrangement, GCL Group will supply stable natural gas to Dangote Group’s upcoming three million tonne per year urea fertiliser production complex in Ethiopia. The plant, valued at $2.5 billion, is being developed under a 60:40 equity structure between Dangote Group and Ethiopian Investment Holdings (EIH), respectively and is scheduled to begin operations in 2029.

Once commissioned, the facility will become East Africa’s largest modern fertiliser production hub, fully meeting Ethiopia’s current urea import demand while supplying neighbouring regional markets. The project is expected to significantly reshape East Africa’s fertilizer landscape, reducing reliance on imports and strengthening agricultural self sufficiency.

The natural gas supplied by GCL will be sourced from the Calub Gas Field in Ethiopia’s Ogaden Basin and delivered via a dedicated 108 kilometre pipeline directly to the Dangote fertilizer complex in Gode, Somali Region. The initiative aligns with Africa’s broader objective of establishing an integrated energy to food value chain, leveraging local resources to drive industrial autonomy.

Describing the significance of the collaboration, President/Chief Executive of Dangote Industries Limited, Aliko Dangote, 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.”

Similarly, the Chairman of GCL Group,  Zhu Gongshan, also reaffirmed the company’s confidence in the partnership, noting that the agreement was made possible through the facilitation and support of the Ethiopian government:

“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,” Gongshan said.

The strategic collaboration marks a historic step in Africa–China industrial cooperation and is expected to catalyse long term economic transformation across East Africa.

Looking ahead, GCL will continue to focus on its core industrial strategy of integrated gas–power–computing development, leveraging Chinese technologies and solutions in synergy with Africa’s development needs, and working together to write a new chapter of mutually beneficial cooperation between China and Africa on this promising land. Both parties noted that the successful conclusion of this cooperation would not have been possible without the strong leadership of the Government of Ethiopia and the active support of the relevant authorities.

Industry analysts note that this project conveys multiple strategic values. Once operational, it will not only help Ethiopia achieve full self-sufficiency in its fertilizer industry but will also unlock the industrial potential of the Somali Region, create thousands of direct and indirect employment opportunities, and drive the high-quality development of regional infrastructure and supporting service industries. At the same time, the clean chemical production pathway based on natural gas as a feedstock aligns with the global trend toward low-carbon transition and provides a model for green development for energy-intensive industries across Africa. This cooperation also establishes a new paradigm for China–Africa collaboration.

By integrating upstream resource development, midstream pipeline transportation, and downstream industrial transformation, it forms a complete closed-loop “gas–fertilizer” industrial chain. In doing so, it deeply combines the technological strengths of Chinese enterprises with Africa’s indigenous resource endowments.

The project will serve as a landmark initiative under the Belt and Road Initiative, demonstrating the synergy between energy development and agricultural advancement, and helping Ethiopia and the broader African region move toward sustainable development characterized by energy independence, industrial revitalization, and food self-sufficiency.

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