By John Ikani
Dangote Refinery is gearing up for its diesel and jet fuel refining operations, set to kick off in October 2023, followed by petrol refining by November 2023.
This was made known by Dangote Group Executive Director Devakumar Edwin during an interview with S&P Global Commodity Insights in September.
In the interview, Edwin disclosed that the Dangote refinery is gearing up to receive its inaugural cargo of crude oil within the next two weeks.
According to him, once the milestone is achieved, the refinery will kickstart production, aiming to yield an impressive 370,000 barrels per day of diesel and jet fuel from October 2023.
Subsequently, by November 30, the refinery will initiate a phased ramp-up, targeting a production rate of 650,000 barrels per day of petrol.
“We are poised and ready to receive crude,” Edwin asserted, emphasizing their readiness. “We are just waiting for the first vessel. And so as soon as it comes in, we can start.”
Edwin addressed a timeline adjustment by explaining that the Nigerian National Petroleum Corporation Limited (NNPCL) had previously committed its crude to another party on a forward basis, which temporarily delayed the refinery’s operations.
However, he assured that this is a transitory issue, and the refinery will exclusively run on Nigerian crude by November 2023.
Notably, Edwin clarified that the purchase of Nigerian oil would be conducted in US dollars, rather than in naira, owing to the refinery’s location within a free zone on the outskirts of Lagos. Nevertheless, NNPCL, due to its equity stake, will supply some crude at reduced prices.
Regarding the refinery’s capabilities, Edwin highlighted its versatility in processing various African crude types, with exceptions for heavy Angolan grades, Middle Eastern Arab Light, and US light-tight oil. He affirmed, “50% of my production will meet 100% of the requirements of the country.”
Also, surplus gasoline meeting stringent Euro 5 quality standards will be exported to other African markets, the United States, and South America, although in relatively modest volumes. Jet fuel will find its way to Europe, while diesel will be distributed across sub-Saharan Africa.
S&P also underscored Edwin’s statement that the Dangote Refinery will be a substantial boon to Nigeria. It will establish a reliable supply of “environmentally friendly” refined products and contribute significantly to the country’s foreign exchange reserves.
In addition, the refinery’s operation will alleviate the fuel supply challenges prevalent in import-dependent West Africa. Nigeria’s recent discontinuation of the fuel subsidy had led to a flourishing illicit gasoline market due to price fluctuations.
Edwin concluded by emphasizing that the funds generated from the refinery’s business activities will be reinvested, as Aliko Dangote remains steadfast in his commitment to furthering investments within Nigeria.
