AS DANGOTE REFINERY COMES ON STREAM…
It’s a triumph of courage and determination
Finally, the Dangote Refinery has begun production after the receipt of an initial six million barrels of crude feedstock, which will see the facility refine diesel and jet fuel in the first instance. For a country that has for years been a net importer of petroleum products, the coming on stream, even if partially, of the over $19 billion Dangote Refinery located in Ibeju-Lekki, Lagos, remains a game-changer. While the refinery will initially commence operation with about 350,000bpd, a large volume by any measure, it is expected to ramp up production to full capacity before the end of the year to include other products like petrol.
Although a private endeavour, the Dangote refinery has become a Nigerian project. Not in recent time has a private sector executed project attracted national attention. This is understandable. First, Nigeria has long relied on imported refined petroleum products, resulting in economic vulnerability and dependency. But that paradigm is likely to shift with the plant having now commenced refining activities. While local refining will not markedly affect the price of products, the sheer magnitude of the facility and the expected trickle-down effect in terms of job creation cannot be downplayed.
Reputed to be the world’s largest single-train petroleum refining facility, the refinery sits atop over 2,635 hectares of land and is projected to meet the country’s total daily liquid products’ requirement. When fully operational, the products will include petrol, diesel, jet fuel and polypropylene and will harbour loading facilities that could accommodate 2,900 tankers as well as spur the building of housing units capable of accommodating 33,000 people.
No sector exemplifies the failure of Nigeria more than the oil and gas industry. Aside from having to contend with wasting trillions of Naira annually on subsidy payments, incessant fuel queues in major cities across the country have exposed the mess in the sector. This has led to a situation in which vehicles on queues stretch for kilometres at fuel stations, with the attendant traffic snarls slowing down commercial and social activities in urban centres. The expectation now is that the Dangote refinery will at least guarantee fuel availability and free the foreign exchange hitherto used in subsidy payment for other development.
With an integrated power plant within the refinery which has a capacity of 435mw–exceeding the total power requirement of Ibadan Distribution Company (Disco)–even for the pessimist, the Dangote refinery remains the single most significant piece of infrastructure Nigeria has witnessed in years. But the issue of adequate feedstock for the refinery appears to be a major challenge. Nigeria, a major oil producer cannot afford to let down the Dangote refinery in that respect. The Nigerian National Petroleum Company Limited (NNPCL) and its partners must ensure the facility gets enough supply of crude oil so as not to disrupt production.
We must commend Alhaji Aliko Dangote for seeing through this refinery project. The local refining of the product is expected to reduce the risk of the consumption of low-quality fuels from Europe and other parts of the world. Already the company has announced that the fuels to be produced from the plant will conform to Euro V specifications. The refinery design also complies with the World Bank, US EPA, European emission norms, and other global standards and employs state-of-the-art technology, the company recently said.
As the Dangote Refinery begins production, we consider this a major triumph not just for Nigeria, but indeed the entire West African region which will likely benefit from its proximity. With a full capacity to process 650,000 barrels of crude oil per day, the project showcases what Nigerians can achieve with a bit of grit and determination. It is also a testament to Dangote’s foresight.
