The Dangote Petroleum Refinery is expected to start manufacturing aviation fuel, or JetA1, and automotive petrol oil, or diesel, in January 2024. However, the production of premium motor spirit, or petrol, is being delayed because of the crude oil supply being delivered in installments.
It was discovered on Sunday that in order for the facility to start producing refined petroleum products like AGO, PMS, Jet A1, and Dual Purpose Kerosene, or kerosene, at full capacity, a minimum of six million barrels of crude oil will be needed.
One million barrels of crude oil, however, were delivered to the refinery last week, and the remaining five million barrels will arrive in five installments over the course of the following five weeks.
Located in the Dangote Industries Free Zone in Ibeju-Lekki, Lagos, Nigeria, the Dangote Petroleum Refinery and Petrochemical Project is a crude oil refinery with a 650,000 barrel per day capacity. It is a subsidiary of Dangote Industries Limited.
Situated in the Lekki Free Trade Zone in Lagos, the Dangote Petroleum Refinery has an area of roughly 2,635 hectares and has the capacity to refine 650,000 barrels of crude oil per day.
The PUNCH revealed on November 2, 2023, that local refineries—including the multibillion-dollar Dangote refinery—were unable to receive crude oil, which caused a halt to the facilities’ ability to produce refined petroleum products.
According to the article, the Dangote Refinery in Lagos, which produces 650,000 barrels per day, failed to meet its October production target, which was the reason for the shortage of crude oil supplies.
It was noted that the October production target miss marked the second time in 2023 that Dangote Refinery would give Africans—particularly Nigerians—hope for the potential cessation of petrol imports.
The Nigerian National Petroleum Company Limited promptly announced on November 3, 2023, that it was scheduled to supply six million barrels of crude oil to the Dangote Refinery in response to The PUNCH’s revelation. But it hasn’t done so yet.
However, the Dangote Refinery’s management announced on Friday that the facility had received a million barrels of crude oil and that this would enable the plant to produce refined goods.
The oil company had announced, “Dangote Petroleum Refinery and Petrochemicals plant has purchased one million barrels of Agbami crude grade from Shell International Trading and Shipping Company Limited, one of the largest trading companies in Nigeria as well as globally, trading over eight million barrels of crude oil per day. This is a major step towards boosting Nigeria’s domestic refining capacity and attaining energy security (self-sufficiency).”
However, when asked on Sunday if the company will begin producing refined PMS based on the one million barrels of oil it received on Friday, a company representative replied that Nigerians should anticipate diesel and aviation fuel in January.
A million and six barrels
The factory needed at least six million barrels of crude to start producing refined petroleum products in full, but last week it only received one million barrels, according to the official.
“A refinery with a capacity of 650,000 barrels per day needs a minimum of six million barrels to begin production. At this point, we have received one million barrels and are discharging them,” the reliable source said, pleading for anonymity because they are not authorised to discuss the subject.
As a result, it is just one million barrels for the time being, and that means we must pay for it in six installments of one million barrels each, the source continued.
However, the source clarified that the manufacture of diesel and aviation fuel will result from the one million barrels, emphasising that PMS, kerosene, and other refined products would follow as the company receives more crude cargoes.
“In the end, that (the one million barrels receipt) means that we should start having diesel by January, possibly in the second week, and then aviation fuel will come before we now cascade to PMS,” the source said.
One million barrels from Agbami were included in the cargo from Shell International Trading and Shipping Company Limited, which sailed to Dangote Refinery’s Single Point Mooring before being dumped into the refinery’s crude oil tanks, according to a statement released by the company. This was the first time that Dangote Refinery had received crude cargo.
“The initial 350,000 barrels per day to be processed by the facility should be sustained by the first one million barrels, which constitute the first phase of the six million barrels of crude oil to be delivered to Dangote Petroleum Refinery by a range of suppliers.
“In two to three weeks, the NNPC will supply the next four cargoes, and ExxonMobil will supply the last of the six cargoes.”
The business said that this supply will “allow the refinery to run more smoothly in the beginning and kick-start the production of diesel, aviation fuel, and LPG, before moving on to the production of Premium Motor Spirit.”
It was stated that this most recent discovery would be crucial in easing Nigeria’s and the West African countries’ problems with petroleum supply.
According to the company, the refinery, which has a capacity of 650,000 barrels per day, can process most African crude grades, Middle Eastern Arab Light, even United States Light tight oil, and crude from other nations. It was specifically designed to process only Nigerian crude, but it can also process crude from other sources.
“Dangote Petroleum Refinery can produce enough petrol, diesel, kerosene and aviation jet to cover all of Nigeria’s needs for refined products, and it also has extra of each of these goods that it can sell.
The refinery was designed to receive crude through two seawater pumping stations (SPMs) situated 25 km offshore, and to release petroleum products through three further SPMs. Furthermore, the refinery’s truck-loading gantries can load 2,900 trucks every day.
The Dangote Refinery is equipped with an independent marine facility that can manage the biggest vessel on the planet. Furthermore, every product that leaves the refinery will meet Euro V requirements.
The corporation declared, “The refinery is designed to comply with African Refiners and Distribution Association standards as well as US EPA, European emission norms, and (defunct) Department of Petroleum Resources emission/effluent norms.”
Aliko Dangote, the president of the Dangote Group, was cited as stating, “We are thrilled to have reached this significant milestone.” This is a significant accomplishment for our nation since it shows that we are capable of planning and completing major capital projects.
“Over the next few months, we intend to fully operate the refinery. As we ship the first batch of goods to the Nigerian market, I eagerly anticipate the next big milestone.
“We welcome the startup of a refinery that is designed to produce petrol, diesel and low-sulfur fuels for Nigeria and across West Africa and are happy to be enabling it,” stated Osagie Okunbor, the country chairman of Shell Companies in Nigeria.
One of our reporters was able to receive a document outlining the facility’s features, which included tank farms totaling 177 tanks with a combined capacity of 4.74 billion litres and 2,900 total tanker loading.
According to the report’s appraisal of the products, up to 80% of the total production was dispatched by road (tanker) facilities for petrol, diesel, kerosene/jet fuel, propane and slurry, and up to 75% was sent through marine facilities.
It was announced that the factory will run road loading operations year-round and that the addition of 1,029 vehicles would increase the capacity of the local logistics.
Regarding the creation of jobs, the document projected that over 100,000 indirect jobs would be generated in retail establishments, in addition to the addition of 129 depots and 26,716 filling stations across Nigeria.
It said that the facility would guarantee easy access to products and assist in the opening of service stations, and that 16,000 vehicles for transportation would generate employment.
“In terms of creating jobs, more than 30,000 people are currently employed by different contractors at the petroleum refinery project site. According to the company’s document, when the petroleum refinery is operational, it would create over 100,000 direct and indirect jobs for young people in Nigeria. It also adds that the refinery will open up a $21 billion yearly market for Nigerian crude.
The site features a 435 megawatt power plant of its own.
The business wrote in the document, “The refinery has its own dedicated steam and power generation system with adequate standby units for reliable/uninterrupted utility supply to operating plants.”
According to the statement, Dangote Industries built quays and a port with a 25 tonne/square metre load-bearing capacity to bring dimensional containers close to the site directly for the handling of liquid cargoes.
“The Jetty is located 12.3km away from the refinery, which significantly cuts down on travel time,” the statement said.
Otedola praises sophistication
Femi Otedola, a rich businessman, responded to the news by saying Dangote Refinery would support Nigeria’s energy security.
On Sunday, Otedola made this announcement on his X (previously Twitter) handle. There, he congratulated Aliko Dangote, the richest man in Africa and his “bestie,” on the refinery’s production starting. The refinery was commissioned in May, just before the term of former President Muhammadu Buhari ended.
“It will champion energy security and independence for our nation and act as a catalyst for a new era of prosperity for the subcontinent,” he declared, “by meeting our requirements for all refined petroleum products.” For current and future generations of Nigerians, it promises economic transformation.
Otedola congratulated Dangote at the beginning of his post on the social media network.
650,000 barrels
“I sincerely congratulate my best friend, #AlikoDangote, on the formal start of construction on the $20 billion #DangoteGroup Refinery, the eighth wonder of the world. The Dangote Petrochemical Complex, which includes the largest single-train petroleum refinery in the world, producing 650,000 barrels of oil per day, a facility producing one million metric tonnes of polypropylene annually, and two of the largest fertiliser trains in the world, capable of producing three million tonnes of urea, is much more than just an industrial milestone, the president said.
Giving further information, Otedola stated, “I am familiar with the sleepless nights you’ve had to work through over the last decade to bring this dream to fruition.” This indicated that he had a front-row seat in the conceptualization and process of establishing the refinery.
He continued, “For millions of Africans and Nigerians, this refinery is a ray of hope.” Additionally, it leads the charge in promoting environmental sustainability. It will help Nigeria achieve its goal of net-zero emissions by 2060 by helping to capture up to 90% of the CO2 emitted through its carbon capture technologies and storage procedures. It will also significantly contribute to lowering well-to-tank carbon emissions from crude oil maritime transportation.
The whole amount of water used by the refinery is recycled. 50 MW of power are produced when all of the process’s heat is captured. In addition, Dangote is manufacturing Euro-5 to replace the subpar Euro-5 that has long been discarded in Africa.
“1.5 million to 2.5 million tonnes of CO2 emissions will be avoided by shipping 480 ships carrying one million barrels per day of refined goods to Nigeria and neighbouring countries, and 65,000 barrels per day of crude out of Nigeria. The environment will benefit from this.
Chief Ukadike Chinedu, the National Public Relations Officer, also discussed the development and praised the Dangote Refinery management’s action.
He said, “We are ready to work with Dangote to ensure the distribution of these refined products across the country. We are optimistic about the commencement of refined products from the facility.”
