Dangote Refinery, 650,000 Bpd: The highly anticipated Dangote refinery, boasting a daily capacity of 650,000 barrels, is on the verge of a significant milestone as it prepares to receive its first shipment of crude oil within the next two weeks. From October onward, the refinery plans to produce approximately 370,000 barrels per day (bpd) of diesel and jet fuel, marking a major stride toward self-sufficiency in fuel production for Nigeria, Africa’s largest oil producer.
Devakumar Edwin, Group Executive Director overseeing the $19.5 billion refinery project, provided insights into the facility’s production timeline, crude oil sourcing, and the challenges that have characterized the project since its inception in 2013.
“We are just waiting for the first vessel. And so as soon as it comes in, we can start,” stated Edwin, indicating the refinery’s readiness to receive crude oil. The Dangote refinery’s phased launch is scheduled to commence with diesel and jet fuel production, estimated at 350,000–370,000 bpd, in October. This initial phase will coincide with the completion of essential units like the crude distillation unit, sulphur block, and hydrogen plant.
Dangote will procure oil from Vitol and Trafigura temporarily.
By November 30, the refinery will commence a phased ramp-up to reach its full daily capacity of 650,000 bpd, with roughly half of the production dedicated to petrol, a crucial fuel in Nigeria’s energy landscape. While S&P Global analysts have predicted that the refinery may not reach full operating capacity until mid-2025, it is expected to substantially reduce Nigeria’s dependence on fuel imports.
Although the Dangote refinery was designed to process Nigeria’s light sweet crude, it currently cannot source crude oil from the state-owned Nigerian National Petroleum Company Limited (NNPC), one of the project’s stakeholders, until November. As a temporary solution, Dangote will procure oil from trading houses such as Vitol and Trafigura. Edwin emphasized that this supply arrangement will be temporary, and by November, the refinery will exclusively use Nigerian crude oil.
Contrary to some reports, the purchase of Nigerian crude oil will be transacted in US dollars, not the Nigerian naira, as the refinery is situated in a free zone outside Lagos. Nevertheless, NNPC will provide some crude oil at discounted prices due to its equity stake in the project.
Edwin highlighted the importance of diversifying crude oil sources, indicating that the refinery’s scale necessitates accessing various African crudes, except for heavy Angolan grades, as well as Middle Eastern Arab Light and even U.S. light tight oil, if global conditions permit.
Dangote refinery to supply Nigeria’s domestic market but also export its refined products
The Dangote refinery aspires to not only cater to Nigeria’s domestic market but also export its refined products. Edwin explained that about half of the refinery’s production will meet the country’s fuel demands, while surplus petrol, meeting Euro 5 quality standards with 10 ppm sulfur, will be exported to other African markets, the United States, and South America.
Furthermore, the refinery will export jet fuel to Europe and sell diesel in sub-Saharan Africa. The facility has two evacuation routes for its refined products—by road and sea—with both routes capable of handling a significant portion of the production.
With pipeline theft and vandalism being major concerns in Nigeria in recent years, Dangote’s pipelines are exclusively connected to single buoy moorings in its purpose-built port, which can accommodate very large and ultra-large vessels. Edwin noted the refinery’s capacity to load a Suexmax in a day and offload a very large crude carrier (VLCC) in a day.
Dangote refinery delays turned out to be advantageous, allowing for increased refinery capacity
The company is also in the process of widening the road connecting the refinery to the expressway, with the project currently 70% complete.
Despite discussions starting in 2013, Dangote only initiated physical construction five years ago, following several delays and challenges. Political interference led to the abandonment of the first plot of land in Ogun State, while the subsequent land purchased in Lagos State required extensive clearing and elevation due to its swampy nature and vulnerability to rising sea levels.
The Dangote Group invested heavily in land elevation, dredging, and infrastructure development, including the construction of a port capable of receiving heavy, assembled equipment, as the country lacked the infrastructure for equipment assembly. The company imported 200,000 piles to prevent land sinking, acquired 320 cranes, and invested in a 10 million quarry per year granite quarry.
Ultimately, the delays turned out to be advantageous, allowing for increased refinery capacity and improved design efficiencies. What began as a 300,000 bpd project transformed into the world’s largest single-train refinery.
Edwin expressed confidence in the enormous benefits the refinery would bring to Nigeria, including a stable supply of environmentally friendly refined products and a substantial inflow of foreign exchange. Additionally, it is expected to alleviate the fuel supply crisis in import-dependent West Africa, where Nigeria’s recently eliminated fuel subsidy led to a thriving illicit gasoline market.
In conclusion
The Dangote refinery, set to receive its first crude shipment shortly, represents a significant step toward Nigeria’s self-sufficiency in fuel production and exportation, while also contributing to the region’s energy stability. Its potential to impact the nation’s economy and fuel supply dynamics is highly anticipated.
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