Aliko Dangote’s Refinery: What to Expect as Crude Stock Arrives

Africa’s richest person, Aliko Dangote, has been making headlines with his ambitious $20-billion project – Dangote’s Refinery. After several years of delays, this mega project is poised to commence production as the first crude shipment finally arrives at the facility. 

The OTIS tanker, carrying a substantial cargo of 950,000 barrels of Nigeria’s Agbami crude was scheduled to en route to Lekki, the nearest land port to Dangote’s offshore crude receiving terminal. Tracked by the S&P Global MINT platform, the tanker was expected to arrive on December 7th, around 7 pm. As the refinery is set to begin operation, heralding the beginning of Dangote’s Refinery’s operational phase, let’s take a look at what to expect.

Dangote’s refinery is poised to end Nigeria’s fuel crisis

In May 2023, Dangote’s Refinery was inaugurated amid high expectations. However, it faced operational delays that sparked concerns about its ability to meet Nigeria’s refined petroleum demands. Nevertheless, as the first shipment of crude oil has now arrived, the refinery is making significant progress toward fulfilling its commitment to supply gasoline to Nigeria by the year’s end.

Boasting an impressive daily capacity of 650,000 barrels, Dangote’s Refinery is poised to play a crucial role in reducing Nigeria’s reliance on gasoline imports. At present, Nigeria imports approximately 1 million to 1.25 million metric tons of gasoline per month due to the suboptimal condition of its existing refineries.

Dangote’s refinery operations plan targets 370,000 daily

Although it is not expected to achieve full operational capacity until mid-2025, Dangote’s Refinery officials have shared their initial operational goals, aiming to reach 370,000 barrels per day. These initial operations will mainly prioritize the production of jet fuel and diesel. However, in a recent interview with the Financial Times, Aliko Dangote revealed even more ambitious aspirations, expressing his anticipation of attaining a refining capacity of 650,000 barrels per day (bpd) by the conclusion of 2024.

Dangote’s Refinery’s initial operation plan

The Dangote Oil Refinery, located in the Lekki Free Zone near Lagos, is a massive integrated refinery with a capacity of 650,000 barrels per day. It boasts the largest pipeline infrastructure in Nigeria, spanning 1,100 kilometers and capable of handling 3 billion Standard Cubic Feet of gas daily. Once fully operational, the refinery will not only meet 100% of Nigeria’s refined product needs but also have a surplus for export. 

This $19 billion project, initially slated for completion in 2018 but delayed multiple times since 2016, was inaugurated on May 22, 2023. Production of diesel, kerosene, and gasoline was set to commence in September and October 2023.

Contemplating the difficulties encountered throughout the extended construction of the $20.5 billion petrochemical complex, which exceeded its budget by $8 billion and faced substantial delays, Aliko Dangote candidly shared moments of apprehension when he worried that this undertaking might jeopardize his business empire.

Nonetheless, despite the challenges, he conveyed his appreciation stating, “It’s either we sink or we sail through. And we thank the Almighty that at least we’ve arrived at the destination.”