Ethiopia's Ministry of Mines has signed an agreement with GCL Energy Investment (Ethiopia Branch) and Jurong Group Holdings Co., Ltd. to advance construction and processing work on the country's liquefied natural gas project. The deal marks a new stage in Ethiopia's efforts to expand natural gas development, building on a strategic framework agreement the parties signed in May 2026. The latest agreement is intended to accelerate the second phase of the LNG project and strengthen development of the country's natural gas industry.
The Calub gas field in the Ogaden Basin, located in Ethiopia's eastern Somali Regional State, is the site of the existing facility. GCL established the country's first skid-mounted LNG liquefaction unit at Calub following its involvement in upstream gas development in the basin. Jurong Group brings experience in natural gas liquefaction, storage, transportation and international trade, drawing on operations in China's Xinjiang region and other markets. Ethiopia's newly appointed Minister of Mines, Alemtsehay Paulos, called on both companies to use the agreement to accelerate construction of the initial module of Phase II, aiming to bring the facility into operation as quickly as possible.
Jurong Group will contribute expertise in project management, storage infrastructure and cross-border trade corridors to support expansion of the Calub gas field project. Wang Dong, executive president of GCL Group and president of GCL Africa Industrial Group, said the partnership would accelerate engineering and development work toward an integrated natural gas industrial chain covering extraction, processing, transportation and downstream applications. The project forms part of Ethiopia's broader ambition to expand domestic energy production, diversify its energy sources and develop industrial uses for natural gas.
The first phase of the LNG project began construction in July 2024 and reportedly entered operation on October 2, 2025. According to information provided by the companies, the first-phase facility was designed to process 200,000 cubic metres of natural gas per day and produce 50,000 tonnes of LNG annually. Several key commercial and technical details of the new agreement remain undisclosed, including the total contract value, financing arrangements, planned capacity expansion, operating costs and processing fees.
The initiative complements efforts to promote natural gas as an alternative fuel for transportation and industry. In May 2026, GCL Africa Industrial Group conducted road tests to convert Ethiopian buses from conventional oil-based fuels to natural gas. The broader programme is expected to support vehicle conversion, development of compressed natural gas (CNG) and LNG refuelling stations, and expansion of natural gas distribution for industrial and other domestic uses. Subsequent project phases are expected to build on the initial infrastructure and expand the role of natural gas in Ethiopia's energy sector.