Chinese company signs MoU on Djibouti LNG project investment

POLY-GCL Petroleum Group, a joint venture between China POLY Group and GCL Group, signed a memorandum of understanding with Djibouti on investing $4 billion in an LNG export project. 

The memorandum, signed on Monday, will be followed by negotiations over concession agreements with the construction expected to start next year, the Djibouti’s energy minister Yonis Ali Guedi told Reuters.

The facility, to be located in Damerjog, near the border with Somalia, will have one liquefaction train in the first phase, allowing for the production of 3 million tons of LNG per year, with an option to be expanded to 10 mtpa, according to POLY-GCL’s website.

Feed gas would be delivered via an 803 km pipeline transporting gas from Ethiopia’s Ogaden Basin to Djibouti, with a planned phase one throughput of 4 bcm per year, the data shows.

Following the MoU signing, a POLY-GCL representative noted that the production from the first phase is expected to start in 2020.

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