Dangote Refinery Begins Operation as it Receives First Shipment

Dangote refinery, a huge project worth $20 billion owned by Africa's richest man Aliko Dangote, is finally set to begin its first production as the first crude shipment arrives at the location. 

This announcement is coming after a series of delays was encountered that shifted its production kick-off. However, this news is a great milestone for the nation's oil industry as it helps the government use funds spent on importing and refining oil in dollars on other sectors that need attention.

Giving an insight of the first shipment, S&P Global, an industry source and tanker data said on its website that the OTIS tanker, carrying a 950,000 barrel cargo of Nigeria’s Agbami crude, set sail on December 6 and is currently en route to Lekki, the nearest land port to Dangote’s offshore crude receiving terminal.

According to the report by Leadership, reveals that the tanker carrying the oil is expected to arrive Nigeria on December 7 around 8pm; the first shipment of oil to Dangote Refinery would initiate operation in the refinery.

The Suezmax tanker, chartered by the state-owned Nigerian National Petroleum Company (NNPC), symbolizes the initial crude supply to Dangote’s state-of-the-art refinery as it gears up to initiate production, revealed a West African oil trader familiar with the matter, the S&P report said

It was recently that the NNPCL announced that it has acquired a 20% stake in the refinery and is set to supply 6 million barrels of crude oil as feedstock to the Dangote refinery in December so that operations can start.

“We have resolved all the issues with crude oil supply,” Dangote stated. “We are now ready to move forward with our plans to list the refinery on the Nigerian Exchange Limited.”

The Dangote Refinery, situated on the outskirts of Lagos, Nigeria’s commercial hub, has faced major challenges since it was announced that development would begin in 2013.

The refinery is designed to process multiple crudes concurrently, the refinery aims to process three Nigerian crude grades — Escravos, Bonny Light, and Forcados. Upon reaching full operational capacity, the facility is anticipated to produce a daily output of 327,000 b/d of gasoline, 244,000 b/d of gasoil/diesel, 56,000 b/d of jet fuel/kerosene, and 290,000 mt/year of propane/LPG, a report shows.

The start of operations is believed to shift Nigeria from its reliance on importation of gas and further cause the government to save more funds. This will also address the inadequacy of its existing refineries currently undergoing repairs.

Dangote Refinery is looking at an initial output of 370,000 barrels per day, and it's primarily focusing on jet fuel and diesel production.