PetroChina International is exploring opportunities to develop a regional oil transportation corridor linking South Sudan to Djibouti through Ethiopia, a project that could provide the landlocked oil-producing country with an alternative export route while strengthening Djibouti’s ambition to become a regional energy hub.
The proposal was discussed during a meeting between the Chairman of Djibouti Ports and Free Zones Authority and a high-level PetroChina International (Middle East) Company Limited delegation led by Deputy General Manager Hu Weiqiang at the Red Sea World Centre this week.
Discussions focused on the proposed construction of a petroleum storage depot with a capacity of 300,000 cubic metres at Damerjog Industrial Park, the possible establishment of an oil refinery and the development of the cross-border transportation corridor.
The proposed route would extend approximately 1,550 kilometres from South Sudan through Ethiopia to Djibouti, crossing areas with a maximum elevation of 2,400 metres. According to the project proposal, the corridor was selected partly because of Djibouti’s existing port facilities and the availability of supporting infrastructure, including roads and electricity, along the route.
The Damerjog Liquid Bulk Port would serve as the main maritime gateway, allowing South Sudanese crude to reach international markets through Djibouti.
The initiative could offer South Sudan an important alternative to its longstanding dependence on oil export pipelines passing through neighbouring Sudan to Port Sudan. Oil exports remain the country’s primary source of government revenue, making disruptions to transportation infrastructure a major economic and fiscal risk.
The conflict in Sudan has repeatedly interrupted oil transportation, forcing shutdowns and affecting South Sudan’s already fragile economy. Establishing another export route through Ethiopia could reduce this vulnerability and provide greater flexibility in accessing international markets.
The proposed corridor is not entirely new. South Sudan previously identified Djibouti as a potential alternative export destination following its independence in 2011, and the two countries subsequently signed a memorandum of understanding for a crude oil pipeline through Ethiopia. However, implementation has made limited progress.
For Djibouti, the discussions complement broader efforts to expand its petroleum storage, processing and transportation infrastructure. Damerjog Industrial Park has attracted investment in a 375,000-cubic-metre petroleum products storage terminal developed by Dangote Industries.
The facility forms part of a $660 million Djibouti-Ethiopia pipeline project connecting Damerjog with Dewele in eastern Ethiopia, which is expected to significantly reduce fuel transportation time between the two countries.
PetroChina International (Middle East), established in 2002, is a wholly owned subsidiary of PetroChina, part of China National Petroleum Corporation (CNPC). The company operates across the Middle East, the Red Sea region and East Africa, trading more than 140 crude oil grades.
CNPC already has substantial interests in South Sudan’s petroleum industry through its leading role in the Dar Petroleum Operating Company joint venture, which operates oil Blocks 3 and 7.
