Nigerian gov starts up the Dangote refinery using its own oil supplies

Three industry sources with knowledge of the situation told Reuters that Nigeria’s national oil company, Nigerian National Petroleum Company Limited (NNPCL), will supply up to six cargoes of crude oil in December to be used in test runs at the new 650,000 barrel-per-day Dangote oil refinery.

The refinery, which was financed by Aliko Dangote, the richest man in Africa, would change the way that oil is traded in the Atlantic Basin and eliminate a profitable market for fuels made in the US and Europe, which have long been used to power generators, vehicles, and trucks throughout the continent.

The refinery is located close to Lagos in the Lekki free trade zone. When it is completely operational, it will enable oil giant Nigeria—which is currently nearly entirely dependent on imports—to become a net exporter of fuels, fulfilling a long-held ambition.

Six cargoes, or 200,000 bpd, will be supplied in December as part of a one-year deal, according to one of the sources, an anonymous NNPC official, who also stated that amounts in subsequent months would be given “based on mutual agreement and availability.”

According to the other sources, there were plans for at least 130,000 bpd, or roughly 4-5 cargoes. When questioned about the NNPC supply deal, a Dangote Group official—who wished to remain anonymous—said, “Some of the agreements have confidentiality clauses,” without providing further details.

The refinery was years behind schedule and over budget, coming in at $19 billion instead of the original $12–14 billion, but it was finally put into commission in May of this year.

Testing and ensuring that the various production units—from petrol to diesel—respond to the control panels are part of the commissioning process.

By REUTERS