Xinghe Signs 25-Year Natural Gas Major Deal with Dangote to Support East African Food Security and Industrial Self-Reliance

Dangote Group of Nigeria and China GCL Group recently reached a major cooperation agreement. The two parties signed a 25-year natural gas supply contract in Lagos, Nigeria, with a total value of approximately $4.2 billion. The agreement aims to support the construction of a large fertilizer production base in Ethiopia, injecting strong momentum into local agricultural development.

According to the agreement, GCL Group will develop natural gas resources at the Calub gas field in the Ogaden Basin. A dedicated pipeline about 108 kilometers long will transport the natural gas to a fertilizer production facility in Gode, Somali Region, Ethiopia. The facility plans to build a comprehensive urea fertilizer production plant, expected to start operation in 2029 with an annual capacity of 3 million tons. Once completed, it will become the largest modern fertilizer production base in East Africa.

The total investment is estimated at around $2.5 billion. In terms of equity structure, Dangote Group will hold 60%, and Ethiopia Investment Holding (EIH) will hold the remaining 40%. This cooperation model reflects a deep integration of international capital and local resources, providing solid support for the smooth implementation of the project.

Aliko Dangote, founder of Dangote Group, stated at the signing ceremony that this cooperation is a significant milestone in promoting industrialization in Africa. He emphasized, “Africa cannot remain forever in a low-end development model of exporting raw materials and importing finished products. Through strategic cooperation with GCL Group, we will build a full industry chain from natural gas extraction to fertilizer production, significantly enhancing Africa’s food self-sufficiency.” This view has been widely recognized by industry experts, who believe the project will effectively reduce Africa’s dependence on imported fertilizers.

Zhu Gongsan, Chairman of GCL Group, pointed out that this cooperation will fully leverage GCL’s expertise in energy infrastructure and form a perfect complement to Dangote Group’s manufacturing layout in Africa. Through resource integration, both sides can improve project operational efficiency and cultivate a large number of skilled technical talents, promoting local employment and economic development.

Industry analysts believe that the project has multiple strategic significances. Economically, it will drive the development of related industrial chains in East Africa and create numerous jobs; socially, local fertilizer production will reduce agricultural costs, increase grain yields, and positively impact regional food security; from an international cooperation perspective, it is another model of deepening collaboration between Chinese and African enterprises in energy and agriculture, further consolidating their strategic economic partnership.

It is reported that preliminary preparations for the project have been fully launched, including gas field exploration and development, pipeline design and construction, and fertilizer plant construction. Both teams stated they will work closely to ensure the project progresses as planned, aiming for early commissioning and making positive contributions to Africa’s industrialization and agricultural modernization.