The much-awaited Dangote Refinery near Lagos has achieved a significant milestone by receiving its first shipment of crude oil feedstock, about one million barrels, from the Nigerian National Petroleum Company Limited (NNPC). An S&P Global Commodity Insights report indicates that this 650,000 barrels per day facility is poised to start fuel production after numerous delays.
The OTIS tanker, loaded with a 950,000 barrel cargo of Nigeria’s Agbami crude on December 6, set off for Lekki, close to Dangote’s offshore crude receiving terminal, and was due to arrive around 1900 GMT on December 7. The Suezmax tanker, under the charter of the state-owned NNPC, marks the beginning of crude supplies to the refinery as it starts to ramp up operations, a West African oil trader confirmed.
Despite its completion in May, the privately owned refinery has not yet started producing oil products, primarily due to a shortage of domestic crude feedstock. NNPC, which owns a 20% stake in the refinery, has committed to supplying six million barrels of crude oil in December.
Chevron operates the Agbami field, one of Nigeria’s most significant deepwater developments in the central Niger Delta. Known for its light sweet crude, Agbami is particularly noted for yielding a substantial amount of naphtha and kerosene.
For now, the refinery will use this crude feedstock for test runs, including checking various units from petrol to diesel and ensuring they respond correctly to control panels, as per industry insiders. Experts have suggested that transitioning from test runs to full-capacity, high-quality fuel production could take several months.
The refinery, built by Africa’s richest man, Aliko Dangote, is expected to transform oil trading in the Atlantic Basin and lessen Nigeria’s dependence on fuel imports from Europe and the United States. Once fully operational, the facility in the Lekki Free Trade Zone (FTZ) is set to make Nigeria a net exporter of fuels, a long-sought goal for the country.
According to a report by This Day Live, NNPC plans further crude oil shipments to the refinery this month, chartering additional tankers from Nigerian offshore fields.
The project unveiled in 2013 and with most key units installed in 2019, has experienced multiple setbacks. The refinery’s crude distillation unit can process 12 different types of crude at once, including three Nigerian varieties: Escravos, Bonny Light, and Forcados.
When fully operational, the plant is expected to produce substantial amounts of petrol, diesel, jet fuel, kerosene, propane, and Liquefied Petroleum Gas (LPG).
This development is vital for Nigeria, which currently imports petrol due to the poor condition of its existing refineries. The Dangote refinery is set to change this, with initial operations focusing on jet fuel and diesel and an expected capacity of 370,000 bpd. However, S&P Global analysts predict the refinery may not reach full operating capacity until mid-2025, with the possibility of further delays.
