Officials at the launch of the Fuelstor facility in Djibouti /HANDOUT Djibouti has commenced construction of a Sh20.7 billion ($160 million) multi-product fuel terminal expected to strengthen energy security and regional trade across East Africa. The Fuelstor Terminal, located in the strategic Damerjog corridor, is being hailed as a major milestone in Djibouti’s energy and logistics infrastructure development at a time when African economies are grappling with supply chain disruptions and volatile oil markets.
The groundbreaking ceremony attracted senior government officials, industry players and international partners, underscoring the project’s regional significance as East African countries seek more resilient fuel supply networks. Beyond being a conventional storage facility, Fuelstor is being developed as an integrated logistics and trading platform aimed at supporting increasing regional demand for petroleum products, liquefied petroleum gas (LPG), edible oil and other essential commodities.
The project, backed by the Salaam Group, comes as East African economies remain vulnerable to global geopolitical tensions that often trigger spikes in shipping costs and fuel prices. Countries such as Kenya, Uganda, Rwanda, South Sudan and Ethiopia heavily rely on imported fuel transported through regional ports and corridors.
Analysts say investments in strategic storage infrastructure could help stabilise supplies and improve regional preparedness during global market shocks. Fuelstor’s location in Damerjog gives it strategic access to Ethiopia and the broader East African hinterland through multimodal transport systems linking ports, roads and regional trade corridors.
The terminal is being developed on 22 hectares and will have an estimated storage capacity of 400,000 metric tons, positioning Djibouti as a key energy redistribution hub in the Horn of Africa and East Africa. “This project represents a defining milestone for Fuelstor and a significant step forward for the region’s energy and logistics landscape,” said Fuelstor General Manager Houssein Ahmed Houmed during the launch.
“Fuelstor Terminal is uniquely positioned to become a key gateway connecting global supply markets to growing demand across East Africa,” he added. Djibouti has increasingly positioned itself as a strategic maritime and logistics gateway linking Africa to the Middle East, Asia and Europe.
The country already hosts critical port infrastructure serving landlocked Ethiopia, one of Africa’s fastest-growing economies. The Fuelstor project is expected to further reinforce Djibouti’s role as a stable trade corridor and logistics center for regional energy flows.
Industry experts note that expanded storage capacity can help reduce supply interruptions and ease pressure during periods of international instability or delayed shipments. Construction of the facility is being undertaken by Somagec, an international engineering firm known for executing large-scale industrial and maritime infrastructure projects.
The investment is also expected to generate hundreds of jobs during both construction and operational phases while supporting skills transfer and local economic growth.