• Sunday, February 25, 2024
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Dangote Refinery to receive first crude shipment as production nears

Dangote’s new plant to compete in $580bn global petrochemicals market

The Dangote Refinery is set to receive its first shipment of crude oil. This development is expected to bring online the $20bn plant that could transform the continent’s biggest economy.

According to BusinessDay’s findings, an OTIS tanker carrying a 950,000-barrel cargo of Nigeria’s Agbami crude set sail on December 6 and is en route to Lekki, the nearest land port to Dangote’s offshore crude receiving terminal.

The tanker, chartered by state-owned Nigerian National Petroleum Company (NNPC), is the first of Dangote’s initial crude supplies as the giant new plant starts to ramp up operations, a West African oil trader said.

NNPC, which owns a 20 per cent stake in the refinery, recently agreed to supply 6 million barrels of crude oil as feedstock to the Dangote refinery in December, company sources said Nov. 5.

Operated by Chevron, Agbami is one of Nigeria’s largest deepwater developments pumping about 100,000 bpd in the central Niger Delta.

Read also Dangote under pressure as giant refinery nears production — FT

Agbami produces light sweet crude with a gravity of 47.9 API and a sulfur content of 0.04 percent, according to Platts’ Periodic Table of Oil.

The crude is known in the market for yielding a large proportion of naphtha and kerosene.

Oil trader told S &P Global that NNPC has chartered several other tankers to transport further crude shipments from Nigerian offshore fields to the refinery later this month

If all goes to plan, Aliko Dangote, Nigeria’s most successful businessman and the richest person in Africa, will bring online a $20bn oil refinery outside Lagos that could transform the continent’s biggest economy.

Read also: Dangote refinery receives one million maiden crude cargo

Starting operations at the vast facility would mark the culmination of a career in which Dangote, whose personal wealth is estimated by Forbes at $10.5bn, has built a fortune through salt, flour, sugar and, most significantly, cement.

Dangote, 66, said he believed the refinery could reach its capacity of 650,000 barrels a day by the end of 2024, although the IMF has said it doubts it will reach more than a third of that by 2025.

At full tilt, the refinery, the world’s largest “single train” facility with just one distillation unit, could save Nigeria billions in foreign exchange currently spent on imported fuel. It was “shameful”, Dangote said, that Nigeria, a major oil producer for more than 50 years, could not refine its crude in anything like sufficient quantity.