China acquires major stake in Calub and Hilala Gas Project in Ethiopia
A Chinese company, China Communications Construction Company (CCCC) has taken a major step to invest in gas development in Africa, building on its expertise in infrastructure construction and offshore engineering.
CCCC has increased its majority stake in the integrated Calub and Hilala gas project in Ethiopia that will involve the construction of both onshore and offshore facilities before the gas can be exported as liquefied natural gas via a terminal in Djibouti.
The project valued at $4 billion will now be able to be kick start after many years of delay in part due to the existing financial constraints.
The project covers the development of two fields in the politically sensitive Ogaden region of Ethiopia and building a cross-nation pipeline for the gas to be liquefied at a floating LNG project in Djibouti.
The 749-kilometer pipeline will start at the long-dormant Calub gas field in the Ogaden basin and will run for 663 kilometers in Ethiopia and 86 kilometers in Djibouti.
The pipeline is being designed to carry 5.2 billion cubic meters per annum of gas, expandable to 18 Bcm per annum over the long term.
The two fields are understood to hold about 4.7 trillion cubic feet of gas and 13.6 million barrels of liquids. LNG would be stored in a floating storage unit to be converted from an LNG carrier before being offloaded.
Development is planned in three phases. First gas is due to flow in 2021 with an initial rate of 3 million tonnes per annum of LNG, expanding to 6 million tpa in the second phase and 10 million tpa in the third stage.