The Dangote Group is set to begin construction on a new 700,000 barrels per day (b/d) refinery in Lamu, Kenya, with a groundbreaking ceremony scheduled for next week. This major infrastructure project aims to significantly boost petroleum refining capacity in East Africa. In parallel, Dangote is partnering with the governments of Ethiopia and Djibouti to build a 120-kilometer refined petroleum pipeline, estimated to cost $660 million. This pipeline will connect Ethiopia and Djibouti, enhancing regional energy distribution.
The broader project also includes the development of substantial storage facilities: 375,000 cubic meters (cbm) in Damerjog, Djibouti, and 800,000 cbm in Ethiopia. These storage capacities are critical for ensuring a stable supply chain for refined petroleum products across the region.
For freight forwarders and logistics professionals, this development signals a future increase in demand for both crude oil imports into Lamu and refined product distribution within East Africa. The new refinery will likely reduce reliance on imported refined fuels, potentially altering regional shipping patterns and bunker fuel availability. The pipeline and storage facilities will create new inland logistics corridors, impacting road and potentially rail freight for last-mile distribution from pipeline terminals. Forwarders should anticipate new opportunities in project cargo for the construction phase and ongoing bulk liquid transport once operational.
