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| Aliko Dangote, Africa's richest man, attends the opening ceremony of Africa's largest oil refinery in Lagos, Nigeria, May 22. (Source: AP) |
The Dangote refinery, built by the eponymous conglomerate of Africa’s richest man Aliko Dangote, plans to export surplus gasoline, turning Africa’s largest oil producer into an export hub for petroleum products. Aliko Dangote also said the plant plans to export diesel. The $19 billion facility in Nigeria’s economic hub of Lagos is one of the world’s largest refineries and has a capacity of 650,000 barrels per day.
The giant petrochemical complex is one of Nigeria’s largest investments. The Dangote refinery cost $19 billion to build after years of delays—higher than the original estimate of $12 billion to $14 billion—and has about $2.75 billion in outstanding debt, according to Nigeria’s central bank governor. The complex also includes a 435-megawatt power plant, a deep-water port, and a fertilizer plant.
President Buhari’s government sees the refinery as the answer to Nigeria’s recurring fuel shortages. The latest fuel shortages have hit the country and its people hard ahead of a disputed presidential election in February. Nigeria spent $23.3 billion last year on petroleum product imports and consumed about 33 million liters of gasoline a day. Dangote’s refinery plans to produce 53 million liters of gasoline a day.
Some analysts have called it a “game changer” for Nigeria’s oil and natural gas sector, which has struggled for years, while others say its capacity could be constrained by oil theft. Most of Nigeria’s state-run refineries are poorly maintained and operate far below capacity. The West African nation must import refined petroleum products for its own use despite being Africa’s largest oil producer.
The Dangote refinery is expected to start refining crude in June, but London-based research consultancy Energy Aspects said commissioning is a complex process and expects operations to start later this year, with 50-70% expected next year, with the other units following in 2025.
Dangote said the new refinery “will allow us to meet not only the needs of our country but also become a major player in the global and African markets”.
The plant, which will start operations before the end of July, will operate alongside a fertilizer plant and be powered by a 435-megawatt power plant, Dangote said. At full capacity, at least 40 percent of the oil produced there will be available for export, generating significant foreign exchange for Nigeria, he added.
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