Dangote refinery enters Asian market, ships first low-sulfur oil to Singapore

Dangote Refinery is set to send a shipment of low-sulfur straight-run fuel oil (LSSR) from Nigeria to Singapore this week, according to ship tracking data and market sources, making the first time breaking into the Asian market.

This shipment initiates a fresh trade route from the recently opened refinery to Asia, which consistently lacks the low-sulfur fuel oil needed for refueling ships at Singapore, the largest bunker hub globally.

Read also: Dangote Refinery makes history with first jet fuel export to Europe

The Dangote refinery, which began operations in January after a $20 billion investment, has the capacity to process up to 650,000 barrels of products per day. Once it reaches full capacity, it will be the largest refinery in Africa and Europe.

Since March, the Dangote refinery has increased its LSSR exports, predominantly sending cargo to the Americas and Europe, as reported by ship tracking data from Kpler and Vortexa.

The first shipment bound for Asia is due to arrive on Wednesday. The Glencore-chartered vessel, Front Brage, will deliver approximately 124,000 metric tons (787,400 barrels) of LSSR to Singapore.

Market sources suggest that the cargo was redirected to Asia due to weaker demand in Europe. Data from LSEG indicates that the east-west spread for front-month 0.5 percent LSFO, reflecting the price difference between these regions, stayed above $40 per ton this week.

Dangote’s LSSR cargoes are priced against Rotterdam’s 0.5 percent LSFO quotes on a free-on-board basis, although the specific pricing differential for this shipment was not disclosed by market sources.

Read also: Dangote Refinery makes history with first jet fuel export to Europe

Another LSSR shipment from the Dangote refinery, containing around 157,000 tons, is expected to reach Singapore in July aboard the vessel Stena Suede, based on ship tracking data.

LSSR is generally mixed with other fuels to create low-sulfur fuel oil (LSFO) for bunkering or used as feedstock in various refinery processes.

In February, Dangote started exporting oil products and began purchasing crude oil, mainly from the Nigerian National Petroleum Company (NNPC) Ltd, in December 2023.