Dangote refinery

By Abubakar Hashim

The 650,000 barrels per day crude oil refined product capacity of Dangote Refinery, located at Lekki Free Trade Zone in Lagos will commence operations in 2022, all variables remain constant.

It will be a game changer in refined petroleum distribution, not only to Nig, but to African countries, particularly West Africa for 3 strategic reasons

1. The Refinery will stem abrupt price fluctuations as the source of the crude oil is Naira denominated so with sales of the refined products, enhanced with the actualisation of the expected ECO currency ,that will ease convertibility

2. The Refinery will drastically reduce freight and allied shipping costs associated to importing refined petroleum products from overseas. It will properly fit into the African Continental Free Trade Agreement ACFTA to booster Intra African trade

3. Other by products like fertilisers urea and others, will be beneficial to agricultural development to other African countries.

Dangote Oil Refinery is a 650,000 barrels per day (BPD) integrated refinery project under construction in the Lekki Free Zone near Lagos, Nigeria. According to dangote.com, it is expected to be Africa’s biggest oil refinery and the world’s biggest single-train facility.

The Pipeline Infrastructure at the Dangote Petroleum Refinery is the largest anywhere in the world, with 1,100 kilometers to handle 3 Billion Standard Cubic Foot of gas per day. The Refinery alone has a 400MW Power Plant that is able to meet the total power requirement of Ibadan DisCo.

The Refinery will meet 100% of the Nigerian requirement of all refined products and also have a surplus of each of these products for export. Dangote Petroleum Refinery is a multi-billion dollar project that will create a market for $11 Billion per annum of Nigerian Crude. It is designed to process Nigerian crude with the ability to also process other crudes.

Nigerian businessman Aliko Dangote unveiled early plans for the refinery in September 2013, whennn, as BBC put it, he announced that he had secured about $3.3 billion in financing for the project. At the time, the refinery was estimated to cost about $9 billion, of which $3 billion would be invested by the Dangote Group and the remainder via commercial loans, and begin production in 2016.However, after a change in location to Lekki, construction of the refinery did not begin until 2016 with excavation and infrastructure preparation, and the planned completion was pushed back to late 2018.

In July 2017, major structural construction began, and Dangote estimated that the refinery would, according to Reuters, be mechanically complete in late 2019 and commissioned in early 2020. According to Reuters, citing sources familiar with the project, construction was likely to take at least twice as long as Dangote publicly stated, with partial refining capability not likely to be achieved until 2022. An associated project at the site of the refinery, a urea fertilizer factory, is scheduled to begin operation in late 2018 and produce about three million tons of urea annually.
The refinery is situated on a 6,180 acres (2,500 hectares) site at the Lekki Free Zone, Lekki, Lagos State. It will process about 650,000 barrels of crude oil daily, transported via pipelines from oil fields in the Niger Delta, where natural gas will also be sourced to supply the fertilizer factory and be used in electrical generation for the refinery complex.

The project is expected to cost up to $15 billion in total, with $10 billion invested in the refinery, $2.5 billion in the fertilizer factory, and $2.5 billion in pipeline infrastructure, Bloomberg Businesweek reported.

With a single crude oil distillation unit, the refinery will be the largest single-train refinery in the world. At full production, the facility will be able to produce 50,000,000 litres (13,000,000 US gal) of gasoline and 17,000,000 litres (4,500,000 US gal) of diesel daily, as well as aviation fuel and plastic products. With a greater capacity than the total output of Nigeria’s existing refining infrastructure, the Dangote Refinery will, as New York Times also put it, be able to meet the country’s entire domestic fuel demand, as well as export refined products.