Dangote Refinery is gearing up to start the refining of petrol by November 30, 2023, with diesel and jet fuel operations set to begin in October 2023, according to Devakumar Edwin, the group’s executive director.
In an interview with S&P Global Commodity Insights, Edwin revealed that the refinery is preparing to receive its first crude cargo within two weeks, with an initial production capacity of up to 370,000 barrels per day of diesel and jet fuel scheduled for October 2023.
The plan also includes a gradual increase in petrol production, aiming to reach an impressive 650,000 barrels per day by November 30.
Edwin emphasized the refinery’s readiness to receive crude oil, stating, “Right now, I’m ready to receive crude. We are just waiting for the first vessel. And so, as soon as it comes in, we can start.”
However, the initial timeline had to be adjusted due to the Nigerian National Petroleum Corporation Limited (NNPCL) having already committed its crude oil to another entity on a forward basis, causing a temporary delay.
Edwin assured that this setback is momentary, and the refinery will exclusively run on Nigerian crude oil as of November 2023.
Notably, the Nigerian crude oil will be purchased in US dollars, not naira, as the refinery is located in a free trade zone on the outskirts of Lagos. Nevertheless, the NNPCL will supply some crude at reduced prices due to its equity stake.
Edwin further mentioned the refinery’s capability to process various African crudes, Middle Eastern Arab Light, and even US light-tight oil, provided the global system permits.
He explained, “Excess gasoline – which will be 10 ppm sulfur Euro 5 quality — will be exported to other African markets as well as the US and South America, although the volumes will be relatively small. Meanwhile, jet fuel will be exported to Europe, and diesel will be sold in sub-Saharan Africa.”
Edwin highlighted the refinery’s significant benefits for Nigeria, including providing a reliable supply of environmentally-friendly refined products and contributing a substantial amount of foreign exchange to the country.
He also emphasized the refinery’s role in addressing fuel supply challenges in import-dependent West Africa, aggravated by Nigeria’s removal of fuel subsidies, which had led to price fluctuations and an illicit gasoline market.
Furthermore, Edwin reiterated that the revenues generated from the refinery’s operations would be reinvested in further developments, underscoring Aliko Dangote’s commitment to Nigeria.
He stated, “The money will be coming back in, and it will go for further investments. [Aliko Dangote] is from Nigeria, and his focus is always on Nigeria.”