Nigeria seeks to end fuel shortage — RT Africa
Nigeria will commission its new Dangote oil refinery on Monday in hopes of easing chronic fuel shortages that have turned Africa’s biggest oil producer into a fuel importer.
The processing plant, which has a capacity of 650,000 barrels per day, is expected to supply the country’s entire fuel demand, according to Nigerian media.
Built by Dangote Group, a conglomerate owned by billionaire industrialist and Africa’s richest man Aliko Dangote, in the Lekki Free Trade Zone near the city of Lagos, the refinery is being touted as a way to end the country’s dependence on imports for almost all of its refined petroleum products.
The giant complex is one of Nigeria’s biggest investments. It has a 435 megawatt power plant, a deep water port and a fertilizer unit. Initially, $12 billion was planned to build the refinery, but the project ended up costing $19 billion after years of delays.
Crude processing is expected to begin in June, although research consultancy firm Energy Aspects said commissioning was a complex process and the facility could not start operating until later this year. It is expected to reach around 50-70% processing capacity next year and full capacity by 2025.
The refinery will produce Euro-V grade gasoline and diesel, as well as jet fuel and polypropylene, the company said, adding that the facility was “designed to process a wide variety of crudes, including many African crudes, some Middle Eastern crudes, and US light oil.”
Despite being Africa’s largest oil producer, Nigeria imports gasoline, diesel and processed petroleum products as many of its own refineries have fallen into disrepair over the years.
According to Dangote, the plant will cover Nigeria’s domestic fuel needs and produce additional volumes that could be exported. It is also expected to boost the Nigerian crude market to $21 billion a year, the company said.
The Nigerian National Petroleum Corporation has a contract with Dangote to supply some 300,000 barrels of crude per day. However, a decline in Nigeria’s oil production resulting from theft, pipeline vandalism and underinvestment poses a threat to full production, economist Kelvin Emmanuel told Reuters.
In April, Nigerian oil production fell to less than 1 million bpd, below Angola’s production, the data showed.
According to Emmanuel, Dangote could import oil from international trading companies such as Trifigura and Vitol, as the refinery has yet to sign deals with oil majors in Nigeria.
Meanwhile, Energy Aspects expects the Dangote refinery to not only solve the fuel shortage in Nigeria, but also reshape the gasoline market in the Atlantic basin.
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