Africa’s largest refinery, the $20bn Dangote Refinery is finally set to commence fuel production as the first crude shipment arrived at the facility Thursday evening, marking a significant milestone for the country’s oil industry.
This comes as a huge relief, after series of delays since its official launch in May, with the lack of domestic crude feedstock hindering product manufacturing.
However, a tanker carrying a 950,000 barrel cargo of Nigeria’s Agbami crude berthed at Dangote’s offshore crude receiving terminal in Lekki at about 7pm on December 7, marking the initiation of crude supplies for the refinery’s operations.
The tanker chartered by the Nigerian National Petroleum Company (NNPC), symbolises the initial crude supply to Dangote’s state-of-the-art refinery as it gears up to initiate production.
It is estimated that the Dangote Refinery will cater to over 12% of Africa’s product demand, potentially reducing petroleum imports across the continent by 36%.
The refinery is also projected to generate over 100,000 job opportunities and stimulate growth in the cosmetics and plastics industries.
The NNPC, owning a 20% stake in the refinery, recently entered an agreement to supply 6 million barrels of crude oil as feedstock to the Dangote refinery in December, aiming to jumpstart operations.
Agbami, operated by Chevron, stands as one of Nigeria’s major deepwater developments, boasting a daily output of approximately 100,000 b/d in the central Niger Delta.
Renowned for its light sweet crude qualities with specific gravity measuring 47.9 API and sulphur content of 0.04%, Agbami yields significant proportions of naphtha and kerosene.
Further shipments from various Nigerian offshore fields to the refinery have been chartered by NNPC, signifying the beginning of a series of scheduled crude supplies throughout December.
Upon reaching full operational capacity, the facility is anticipated to produce a daily output of 327,000 bpd of gasoline, 244,000 bpd of gasoil/diesel, 56,000 bpd of jet fuel/kerosene, and 290,000 mt/year of propane/LPG.
This much anticipated shift is expected to transform Nigeria’s oil industry landscape.
While Dangote officials foresee an initial output of 370,000 bpd, primarily focusing on jet fuel and diesel production, industry analysts expect the refinery to achieve its full operational capacity around mid-2025.
Dangote had earlier said in an interview in November, that the refinery would start with refining Nigerian crude.
He said the refinery’s first priority is to supply petrol to Nigeria before exporting elsewhere, including the West African region.
“We don’t want to start our refinery with foreign goods, we want to start with the Nigerian crude.
“We’re more than ready and you will see our gasoline products soon.”
The refinery situated on the outskirts of Lagos, Nigeria’s commercial hub, had faced delays since its announcement in 2013, despite substantial installation progress made in 2019.
In September 2023, the refinery announced that it will start producing diesel and kerosene in October 2023 and gasoline one month later.
In October, it was clear that the refinery would not yet be able to start operations because the supply of crude oil was stalling, which caused considerable public reaction.
On 25 November, a new date of December 2023 was given for the start of operations, with the refinery expecting a delivery of 6 million barrels of crude oil this month.
Source: Arise
