Saturday, June 3, 2023

Dangote Refinery commences operations, targeting crude supply from multiple continents

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Dangote Refinery commences operations today, with its 650,000 barrels per day oil processing facility capable of refining crude oil from Africa, Asia, and America. The refinery is expected to produce an excess of 38 million liters of petrol, diesel, kerosene, and aviation fuel daily, satisfying Nigeria’s complete fuel demand. According to company data, the refinery has the potential to facilitate the establishment of 26,716 filling stations, generate 100,000 direct and indirect jobs, and create a $21 billion market for Nigerian crude oil annually. The inauguration of the refinery, built by Africa’s wealthiest individual, Aliko Dangote, will be conducted by President Muhammadu Buhari.The Dangote Refinery, the world’s largest single-train refinery, is poised to bolster the Nigerian government’s efforts towards achieving self-sufficiency in crude oil refining and reducing reliance on costly petroleum product imports. Scheduled for inauguration on May 22, 2023, by President Muhammadu Buhari, the refinery is a subsidiary of Dangote Industries Limited, with a capacity to process 650,000 barrels per day of crude oil. Located in the Dangote Industries Free Zone in Lagos, Nigeria, the refinery covers an expansive area and is designed to convert crude oil into various essential petroleum products such as diesel, gasoline, jet fuel, and kerosene. Notably, it is equipped to handle a diverse range of crude oil types, including African, Middle Eastern, and US Light Tight Oil. With its production of Euro-V quality gasoline, diesel, jet fuel, and polypropylene, the refinery aims to meet the domestic demand for all liquid petroleum products in Nigeria, ensuring 100% sufficiency while generating surplus quantities for export.

According to the provided document, the Dangote Refinery has been designed to incorporate advanced technology, ensuring compliance with strict environmental regulations while producing environmentally friendly petroleum products for global markets.

In terms of Nigeria’s fuel requirements and the refinery’s supply capabilities, the document reveals a surplus production of 38 million liters per day of petrol, kerosene, aviation fuel, and diesel. Specifically, the refinery is projected to yield a daily surplus of 20 million liters of petrol, one million liter of kerosene, one million liter of JetA1 (aviation fuel), and 16 million liters of diesel.

Regarding product distribution, the refinery utilizes road and marine facilities for dispatch. Road (tanker) transportation accounts for up to 80% of total production, while marine facilities handle up to 75%. The refinery operates its road loading facilities year-round, boasting 177 tank farms with a combined capacity of 4.74 billion liters and a total of 2,900 tanker loadings based on a capacity of 33 KL per tanker.

The Dangote Refinery project, situated within the Dangote Industries Free Zone Area of Ibeju-Lekki, Lagos, encompasses various complex components such as engineering, procurement, construction, pre-commissioning, and storage facilities. Notably, Dangote stands out as one of the few companies globally undertaking the role of an Engineering, Procurement, and Construction contractor for both a petroleum refinery and a petrochemical complex. Except for three companies, no individual owner has undertaken the complete EPC contract for a petroleum refinery on a global scale.

According to the document, the premises of the refinery can accommodate a total of 33,000 temporary housing units.

To ensure reliable and uninterrupted utility supply, the refinery is equipped with its own dedicated steam and power generation system, including standby units. The power plant has a robust capacity of 435MW.

Regarding the roll-on/roll-off quay, Dangote Industries has developed a port with quays capable of bearing loads of 25 tonnes per square meter. This infrastructure facilitates the handling of Over Dimensional Cargoes and liquid cargoes, reducing travel time as the jetty is located 12.3km away from the refinery. Additionally, there are more than 1,029 trucks available to enhance local logistics capacity.

In terms of employment generation, the facility has the potential to create over 100,000 indirect job opportunities through retail outlets, 26,716 filling stations, and 129 depots across Nigeria. By promoting the establishment of service stations and utilizing 16,000 trucks for transportation, additional jobs will be generated. Currently, there are over 30,000 individuals working at the petroleum refinery project site under various contractors.

The firm highlighted that once operational, the petroleum refinery will generate over 100,000 direct and indirect employment opportunities for Nigerian youth, contributing to job creation and economic growth.Expanding on additional investments made in the facility, the document emphasized that 70% of the site consisted of swampy areas, requiring land reclamation efforts.

According to the document, approximately 65 million cubic meters of sand filling, with a cost of around 300 million euros, was dedicated to raising the plant’s elevation by 1.5 meters. This measure aimed to mitigate any potential impact of rising sea levels resulting from global warming.

Regarding civil construction, the document highlighted the acquisition of 1,209 pieces of equipment to enhance local capacity for site works. Even major construction companies like Julius Berger, Dantata & Sawoe, and Hi-Tech were unable to handle certain aspects of the project’s construction requirements. Additionally, in the field of mechanical construction, 332 cranes were purchased to bolster equipment installation capacity, as Nigeria’s current capacity in this area was deemed inadequate.

Excitement Surrounding the Refinery

The Abuja Chamber of Commerce and Industry expressed its enthusiasm in celebrating the remarkable achievement of Aliko Dangote, the Chairman of Dangote Refinery, for investing in the development of Africa’s largest refinery. Situated in the Lekki Free Trade Zone in Lagos State, the Dangote Refinery is expected to revolutionize the Nigerian oil and gas industry. With a refining capacity of 650,000 barrels per day, the refinery will not only produce high-quality gasoline and diesel but also petrochemicals and aviation fuel.

Recognizing the significance of this investment in job creation, economic improvement, and the advancement of Nigeria’s oil and gas industry, the Abuja Chamber of Commerce and Industry (ACCI) emphasized the potential for attracting foreign capital and reducing the nation’s dependence on oil imports. The ACCI President, Al-Mujtaba Abubakar, praised Aliko Dangote’s vision and commitment to transforming the Nigerian economy, hailing the investment as a game-changer that demonstrates Dangote’s unwavering determination to create sustainable value for Nigeria and Africa. The chamber also highlighted the Dangote Refinery’s potential to drive technological and industrial development while promoting local content in the oil and gas sector. The ACCI commended this remarkable achievement and encouraged other entrepreneurs to follow Dangote’s lead in investing in Nigeria.

Industry operators, such as the National President of the Independent Petroleum Marketers Association of Nigeria, Chinedu Okonkwo, expressed optimism regarding the refinery’s impact. Okonkwo emphasized that apart from creating jobs, the refinery would help reduce the cost of deregulated petrol. He emphasized that the refinery would provide hope for the nation, generating employment opportunities, ensuring product availability, and eliminating the time spent on petroleum product imports, ultimately benefiting Nigeria’s progress.

When asked about the potential impact of the Dangote Refinery on petroleum product prices, Chinedu Okonkwo explained that as a private businessman, Dangote’s aim is to make money. However, he pointed out that if the petroleum business is deregulated, it would lead to cheaper products. Okonkwo highlighted that addressing the cost of freight, refining, and transportation would provide a significant advantage for the country and contribute to reducing prices.

Pressed further on whether petrol prices would specifically be lower once the refinery starts production and deregulation takes effect, Okonkwo responded affirmatively, stating that it would alleviate the challenges of availability and affordability.

Okonkwo urged oil marketers to support the Dangote Refinery, emphasizing that it would not only generate more revenue for operators but also benefit all Nigerians. He emphasized the importance of product availability for their business and how it would positively impact everyone within the system.

Chief Ukadike Chinedu, the National Public Relations Officer of IPMAN, also expressed optimism and excitement among oil marketers upon learning about the imminent inauguration of the refinery. He expressed hope that the facility would address issues of inadequate petroleum product supply, which often resulted in recurring scarcity of petrol across the country.

“We believe that with the establishment of the Dangote Refinery, Nigeria will bid farewell to petrol scarcity and the inadequate supply of other petroleum products,” stated Ukadike, expressing optimism about the refinery’s impact.

According to an oil firm statement released on Sunday, President Muhammadu Buhari, alongside leaders from Ghana, Togo, Senegal, Niger, and Chad, will inaugurate the multi-billion-dollar refinery. The event is expected to be attended by international dignitaries, including Presidents Gnassingbé Eyadéma of Togo, Nana Akufo-Addo of Ghana, Macky Sall of Senegal, Mohamed Bazoum of Niger Republic, Mahamat Déby of Chad, as well as several ambassadors. President Paul Kagame of Rwanda will participate virtually and deliver his goodwill message.

The statement also mentioned that all 36 state governors, governors-elect, ministers, senators, and prominent industrialists from Nigeria and abroad have expressed their interest in attending. Additionally, global oil traders, top international bankers, and international multilateral agencies have indicated their readiness to grace the ceremony.

Bola Tinubu, Nigeria’s President-Elect, who initiated the Free Trade Zone in Ibeju-Lekki during his tenure as the Governor of Lagos State in 2002, is also expected to be present at the event.

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