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Dangote Refinery set for production with arrival of 950,000 barrels of crude

Dangote Refinery has the potential of reducing the continent’s fuel imports by 36%.

Aliko Dangote [Nairametrics]

Since the refinery’s official launch in May, the lack of crude supply has been a setback to the project thus stalling the August 2023 deadline earlier scheduled for fuel production.

The berthing of a tanker carrying 950,000 barrel cargo of Nigeria’s Agbami crude at Dangote’s offshore crude receiving terminal in Lekki has changed the narrative and has marked a great milestone in the country's petroleum sector.

The Chairman of Dangote Industries, Aliko Dangote in an earlier interview with The Financial Times had stated that the refinery would commence operations in December 2023 with a production target of 350,000 barrels per day.

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The NNPCL which owns a 20% stake in the refinery has recently confirmed it will provide six million barrels of crude oil to the Dangote Refinery. Recall the NNPC spokesperson, Garba Deen, earlier said the nation’s oil company would cut down operations once the Dangote refinery started operations.

S&P Global has further confirmed the NNPCL has chartered several other tankers to transport more crude shipments from Nigerian offshore fields to the refinery later this month. The report however predicted that even with the large crude supply, the refinery may still have to grapple with major operational issues and will not hit full operating capacity until mid-2025.

Some petroleum analysts have, however, linked the stalled operations in the Dangote refinery and some refineries to insufficient crude oil supply. The FG had blamed the development on low oil output.

According to the S&P Global MINT tanker tracking platform, the 950,000 barrel cargo OTIS tanker was chartered by a state-owned Nigerian National Petroleum Company and is Dangote’s first crude supply since inception.

Some analysts have said Dangote Refinery will take care of at least, 12% of Africa’s petroleum product demand, and has the potential of reducing the continent’s fuel imports by 36%.

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Currently, due to the poor state of the country’s refineries, Nigeria needs about 1.25 million mt/month of fuel to meet consumer demands.op

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