Somaliland and Ethiopia look to China deals
Somaliland and Ethiopia have announced a series of oil-related deals with China in a move to improve their oil infrastructure and economy.
The deals include funding to build an oil and gas pipeline network from Somaliland and Ethiopia's Ogaden Basin to the port of Berbera along with processing facilities in the city itself.
The plan is just part of a major expansion project which includes Berbera sea port - likely to become the nation's main maritime hub under Chinese management. Aspirations are to make Berbera more competitive than the neighbouring port in the Republic of Djibouti, with enhanced road and rail access included in the plan.
The overall project has been described by Ethiopian and Somaliland government officals as "the biggest investment in the country yet."
Financing the facelift will come from deals with the Chinese government to export oil and gas from Berbera. This includes the recent announcement of a $4bn deal between Hong Kong-based PetroTrans to develop eight exploration blocks in the Ogaden Basin, with PetroTrans also financing the port and infrastructure development.
In return, Ethiopian Shipping Lines (ESL) a potential main shareholder for Berbera Port, has placed a $293m order for nine Chinese-built vessels, all of which could see service out of Berbera.
