By Ebi Kesiena
Dangote Petroleum Refinery in Lekki, Lagos, has acquired its first shipment of one million barrels of Algeria’s high-quality light sweet Saharan Blend crude oil, according to a report by Argus.
A Punch newspaper report on Monday described this as a significant milestone for the refinery, which is diversifying its crude oil sources while working towards its full refining capacity of 650,000 barrels per day.
The shipment, expected to arrive between 15 and 20 March, marks the refinery’s first use of Algerian crude, known for its low sulphur content and high refining yields. Saharan Blend, with an API gravity of 45.3 and just 0.1% sulphur content, is highly sought after and traditionally exported to Europe.
According to the report, the refinery purchased the shipment from trading firm Glencore last week, though neither party disclosed the price.
“None of the tankers that have loaded in Algeria so far in February have flagged Africa as their destination, suggesting this cargo will load in March,” the report stated.
Citing a trader, the report noted that Saharan Blend’s quality is well-suited for the Dangote refinery and is competitively priced compared to Nigerian grades.
“So far this year, nearly 420,000 barrels per day of crude have been delivered to Lekki for Dangote, with about 82% being light sweet grades,” according to Vortexa data. Nigerian crude accounted for 87% of all arrivals.
The slow start of the March-loading trade cycle for Saharan Blend was attributed to weak European demand due to seasonal refinery maintenance and an ample supply of light crude. This may have led European buyers to delay purchases in anticipation of lower prices, prompting sellers to explore alternative markets.
Saharan Blend prices dropped by $1 per barrel this month while March-loading cargoes were trading, now standing at a $0.20 per barrel discount to the North.
Beyond Algeria, the Dangote refinery has been exploring long-term crude supply agreements with international markets, including the United States and Brazil. Last year, Aliko Dangote, the refinery’s founder, stressed the importance of expanding sourcing beyond local suppliers:
“We will start importing crude oil from African countries. When we get to those countries, we’ll start negotiating with them and bringing in supplies from there.”
However, he noted that if Nigerian crude were readily available, there would be no need to look elsewhere.
