(Ecofin Agency) - In Djibouti, a ceremony to commence the construction of a liquefied natural gas (LNG) export terminal was held on Thursday in Damerjog.

The LNG facility is to be developed by POLY-GCL Petroleum Group, (a joint venture between China POLY Group and GCL Group). The project is estimated to cost $4 billion with initial LNG export anticipated by mid-to-late 2018.

According to POLY-GCL, the terminal will include one liquefaction train in phase 1, permitting the production of 3 mtpa, with an option to be extended to 10 mtpa.

Feed gas will be supplied to the terminal through an 803 km pipeline conveying gas from Ethiopia’s Ogaden Basin to Djibouti, with a phase 1 capacity of 4 bcm annually.

POLY-GCL had signed 5 production sharing agreements (PSAs) with the Ministry of Mines of Ethiopia in November 2013. This LNG terminal will have access to LNG carrier with the capacity of about 267,000 cbm and will transport the chilled fuel to China.

The company has also entered into a memorandum of understanding (MoU) for the conveyance of LNG with China LNG Shipping Company, LNG World News reports.

Anita Fatunji