Finally, Dangote Refinery Set for Production, Gets First 1m Barrels Crude Oil Feedstock

Emmanuel Addeh in Abuja

The much-awaited Dangote Refinery located near Lagos, yesterday received its first tanker of crude oil feedstock volume of about one million barrels from the Nigerian National Petroleum Company Limited (NNPC).

An S&P Global Commodity Insights report revealed that the cargo was supposed to have landed at the 650,000 barrels per day facility yesterday.
Quoting market sources and tanker tracking data, S&P indicated that fuel production at the new $19 billion refinery was set to start after years of delays and deferments.

Specifically, the OTIS tanker, conveying the crude, loaded a 950,000 barrel cargo of Nigeria’s Agbami crude on December 6, and was flagged as en route to Lekki, the nearest land port to Dangote’s offshore crude receiving terminal, according to the S&P Global MINT tanker tracking platform.  
“It is expected to arrive later on December 7 at around 1900 GMT,” the report added,
The Suezmax tanker, chartered by state-owned NNPC, was the first of Dangote’s initial crude supplies as the giant new plant starts to ramp up operations, a West African oil trader said.

The privately-owned refinery was officially completed in May but has yet to make any oil products, partly due to a lack of domestic crude feedstock.
NNPC, which owns a 20 per cent stake in the refinery, recently agreed to supply six million barrels of crude oil as feedstock to the Dangote refinery in December, company sources said November 5.

Operated by Chevron, Agbami is one of Nigeria’s largest deepwater developments pumping about 100,000 bpd in the central Niger Delta.
Agbami produces light sweet crude with a gravity of 47.9 API and a Sulphur content of 0.04 per cent, according to Platts’ Periodic Table of Oil.  The crude is known in the market for yielding a large proportion of naphtha and kerosene.

However, the crude feedstock would initially be used for test runs, industry sources with knowledge of the matter said recently, including testing the different units that make products, from petrol to diesel and making sure they respond to the control panels.

Experts said it could take months for refineries to move from test runs to producing high-quality fuels at full capacity.
The refinery, built by Africa’s richest man, Aliko Dangote, was expected to transform oil trading in the Atlantic Basin and remove a lucrative outlet for fuels produced in Europe and the United States that have for years powered the cars, trucks and generators on the continent.

The refinery is in the Lekki Free Trade Zone (FTZ) and once it is fully up and running, would turn oil powerhouse Nigeria into a net exporter of fuels, a long-sought goal for the country.
But S&P said the NNPC has also chartered a number of other tankers to transport further crude shipments from Nigerian offshore fields to the refinery later this month, quoting an oil trader.

The project had been repeatedly delayed since it was unveiled in 2013, although most of the key units were installed in 2019.
The crude distillation unit was designed to process 12 crudes at one time and has been engineered to process three Nigerian crude grades, namely: Escravos, Bonny Light and Forcados.

Once fully operational, the plant would yield 327,000 bpd of petrol, 244,000 bpd of gasoil and diesel, 56,000 bpd of jet fuel and kerosene as well as 290,000 metric tonnes per year of propane and Liquefied Petroleum Gas (LPG), according to previous Dangote presentations.

The country hopes the Dangote refinery would help end its dependence on petrol imports. Nigeria has to import about one million to 1.25 million metric tonnes per month of petrol to meet national demand due to the poor state of its existing refineries, all of which are currently shut for repairs.
Nigeria currently exports almost all of the crude and condensate it produces.

Dangote officials have previously told S&P Global Commodity Insights that the refinery would start operating at 370,000 bpd, producing mostly jet fuel and diesel initially.
However, S&P Global said its analysts expect that the refinery will not hit full operating capacity until mid-2025, with further delays still possible.