Dangote launches $2.5bn fuel terminal and pipeline project in Namibia

Africa's richest man, Aliko Dangote, has launched a $2.5 billion fuel storage and regional pipeline project in Walvis Bay, Namibia. The project is designed to strengthen fuel supply across Southern Africa and reduce the region's dependence on costly and vulnerable supply routes.

The facility was unveiled on Wednesday in Walvis Bay at a ceremony attended by Namibian President Nandi-Ndaitwah. Dangote said it would improve energy security across six African countries and position Walvis Bay as a major regional fuel logistics hub.

Storage capacity and construction timeline

The proposed fuel terminal will store about 600 million litres, equivalent to nearly four million barrels. Of that volume, 360 million litres will be reserved for diesel while 240 million litres will hold petrol.

The terminal will be eight times larger than Namibia's existing 75 million-litre National Oil Storage Facility, which is operated by the country's national oil company, Namcor. Construction is expected to take about 18 to 20 months.

The project also includes a 1,700-kilometre pipeline connecting Namibia to Botswana, Zimbabwe, Zambia and potentially the Democratic Republic of Congo. Dangote said the investment would reduce transportation costs and supply disruptions. Namibia is expected to benefit from improved fuel availability, lower logistical risks and expanded infrastructure.

Dangote's wider African energy push

The Namibian project follows Dangote's plan to build a $16 billion refinery in Kenya. His refinery in Lagos, Nigeria, currently has a stated capacity of 700,000 barrels per day, with further expansion planned. He has also announced plans for another 700,000-barrel-per-day refinery in Kenya.

The expansion adds to Dangote's growing portfolio of energy projects across Africa. It also follows an earlier announcement that the conglomerate would pursue major investments in petroleum pipelines, storage facilities and distribution corridors across East, Central and Southern Africa after the acquisition of a 25 per cent stake in a Kenyan pipeline network.

Regional market and Nigeria angle

Gerrit van Rooyen, a senior economist at Oxford Economics Africa, described the Namibian project as part of Dangote's broader strategy to establish distribution networks for refined petroleum products. He said the expansion would help diversify Dangote's export markets and reduce dependence on Europe and East Asia, where the transition towards cleaner energy could weaken long-term fuel demand.

The project comes as African economies grapple with volatile international oil prices and supply uncertainties linked to geopolitical tensions in the Middle East, Reuters reported.

For Nigeria, the investment could create additional regional markets for refined petroleum products. Actual export volumes will depend on future supply arrangements and infrastructure completion.