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Sunday, February 25, 2024

Dangote refinery: Milestone achieved amidst crude supply challenges

Nigeria's Dangote Petroleum Refinery gears up for production, with diesel and aviation fuel expected in January 2024

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The highly anticipated Dangote Petroleum Refinery is poised to commence production of Automotive Gas Oil (diesel) and JetA1 (aviation fuel) in January 2024. However, the production of Premium Motor Spirit (petrol) faces delays due to the installment-based supply of crude oil.

The facility, a subsidiary of Dangote Industries Limited, is a colossal 650,000 barrels per day crude oil refinery situated in the Dangote Industries Free Zone, Ibeju-Lekki, Lagos, Nigeria. Despite its extensive capacity, the refinery is contending with a phased delivery of crude oil, requiring a minimum of six million barrels to initiate full-scale production of refined petroleum products.

Last week, the refinery received one million barrels of crude oil, leaving an additional five million barrels to arrive in five installments. This comes after a missed production target in October, marking the second instance in 2023 where hopes for ending petrol importation in Nigeria were raised and subsequently deferred.

The Nigerian National Petroleum Company Limited pledged to supply six million barrels following newspaper reports, yet this commitment remains unfulfilled. The recent confirmation of the receipt of one million barrels from Shell International Trading and Shipping Company Limited signals a step forward for the refinery, kickstarting the production of diesel and aviation fuel.

An official from Dangote Refinery revealed that the facility requires six million barrels to commence full production. With the recent receipt, the refinery plans to take further installments before initiating the production of petrol, kerosene, and other refined products.

The company stated, “By January, maybe in the second week, we should start having diesel, after which aviation fuel will come before we cascade to PMS.”

Dangote Refinery’s ability to process 650,000 barrels of crude oil per day positions it as a significant player in Nigeria’s quest for energy security and self-sufficiency. The refinery is expected to play a pivotal role in addressing fuel supply challenges in Nigeria and neighboring West African countries.

The facility, designed for 100 percent Nigerian crude, boasts flexibility to process various African and Middle Eastern crude grades, as well as U.S. light-tight oil. The refinery’s capacity extends to meet 100 percent of Nigeria’s refined product requirements, with surplus for export.

Despite the delays, Dangote Group’s President, Aliko Dangote, expressed optimism, stating, “Our focus over the coming months is to ramp up the refinery to its full capacity.”

The refinery, equipped with a self-sufficient marine facility and a 435-megawatt power plant, aims to contribute significantly to job creation, infrastructure development, and economic growth in Nigeria.

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