Dangote Commissions Africa’s Largest Oil Refinery in Nigeria
On 22 May 2023, the Chairperson of Dangote Group, Mr Aliko Dangote, invited the Nigerian President, Muhammadu Buhari, to officially commission the largest oil refinery in Africa located in the Lekki #SEZ in Lagos, Nigeria.
Due to the regional reach of the project, in addition to the Nigerian President, the Presidents of neighboring Ghana, Togo, Niger, Senegal and an emissary from the President of Tchad also made it a point to attend the ceremony.
“The Dangote refinery will allow Nigeria, once and for all, to eliminate toxic and sub-standard petroleum products from being dumped into Nigeria’s market.”
Nigerian President Muhammadu Buhari
The project costs nearly USD 20 billion and was financed by a consortium of local and international banks led by Standard Chartered Bank. The Nigeria National Petroleum Corporation (NNPC) holds an 20% stake in the project.
The refinery and petrochemical complex occupies a land area of 26.4 square kilometers and the main EPC Contractor Engineers India Limited took nearly seven years to complete the project, while successfully surmounting challenges due to COVID.
The crude oil is delivered to the refinery via a 1,100-km long subsea pipeline and there is also a 45-meter deep dock to accommodate ultra-large carriers. The project necessitated a 400 MW power plant which can also feed into the grid of the Ibadan Electricity Distribution Company (DisCo). As part of the petrochemical complex, fertilizers and plastics will also be manufactured.
The production capacity of the refinery plant is designed to be well above the current demand from the local Nigerian market with the surplus available for export mainly to the #ECOWAS region in line with the aspirations of the #AfCFTA and AU #Agenda2063. When fully operational, the plant will process 650,000 barrels per day (bpd) of crude oil.
Needless to say, by refining and exporting oil, Nigeria will gain in foreign currency reserves thanks to Local Value Addition (#LVA). In terms of employment, the project is estimated to create 4,000 direct jobs and sustain some 145,000 jobs indirectly across the West Africa Region. In fact, President Buhari went so far as to qualify the project as a game changer.
Previously, Nigeria had four state-owned refineries with a combined capacity of 450,000 bpd but they have all become dilapidated due to lack of #GoodGovernance. At 650,000 bpd, the Dangote Oil Refinery will enter the Global Top 10 league. Ironically, oil-rich Nigeria even suffered fuel shortage in the recent past and the Government of Nigeria had to pour billions of dollars in fuel subsidies to cushion the rise in oil prices.
“The refinery is the realization of ‘a clear opportunity’ whose time has come. This plant will further entrench Africa’s role on the global map as not only a valued contributor for natural resources, but also a competent manufacturer of refined products and fertilizer. As a result, several African nations will be less reliant on importing fuel and fertilizer from foreign markets, reducing the negative impact of negotiating terms within increasingly turbulent international markets.”
Dangote Group Chairman Aliko Dangote
Among the finished products, the refinery plans to output and market petrol, diesel, kerosene and aviation jet fuel. Adopting the latest technologies, the refinery can produce different petroleum products from a single-train as opposed to requiring separate trains for different products. The first barrel of refined petroleum is expected to come to market by August 2023.