Widely regarded as having huge potential, Ethiopia remains under-explored with only a few discoveries to its name.

In the 1970’s, two gas fields, Hilala and Calub, were discovered by Teneco. Shortly after, the long serving emperor was forced out in a revolution and the government aligned with the Soviet Union. Naturally, American oil company Teneco was booted out too and the discoveries were transferred to the Soviet Petroleum Exploration Expedition.

Ethioia Overview Map

Fields, licences and planned pipelines in Ethiopia. MapStand platform

Until their demise, the Soviet’s conducted a significant amount of appraisal and development activity on the two fields between 1986 and 1991. Ever since, the assets have yo-yo’d between private companies which failed to do anything with them.

Fast forward to 2012, China's state-owned Poly GCL picked these assets up and got straight to work, further appraising the fields and making an additional discovery at Dohar, even encountering oil too. Plans are now in motion to construct a 765km pipeline through to Djibouti and build an LNG export terminal in the country.

But how much gas is there?

Hilala Satellite Image 2015

Hilala Satellite Image 2020

Hilala 2015 vs 2020. Can you spot the seismic lines?

Published figures from 1993 between the two fields put initial gas in place at 4 TCF and 128 million barrels of condensate. Figures floating around on the internet today somewhat vary, but the general consensus puts it closer to 7-8 TCF now. Even so, not massive numbers in the context of all the other global LNG projects jostling for FID.

If you asked what most industry analysts thought 5 years ago, they would probably have wagered against the project going ahead. But they likely ignored two very important elements. Chinese state-owned company and the geopolitical significance of Djibouti.

Djibouti has found it-self in a crossfire of geopolitical competition between the East and the West. Strategically positioned in the Horn of Africa and at the entrance of one of the world's busiest maritime trade routes, both superpowers have set up Military bases in the country, and both are seeking to win influence where they can.

Construction has yet to begin, but dialogue from all involved in the project remains positive.