Dangote Refinery Is a Great Milestone for Nigeria

Dangote refinery, situated in the Lekki Free Zone near Lagos, Nigeria, is owned by Africa’s richest man, Aliko Dangote. It is a $20 billion project set to make Nigeria one of the major exporters of crude oil.

Once the Dangote refinery commences full operation, it will be Africa’s biggest oil refinery and the world’s biggest single-train facility.

The refinery is expected to refine 650,000 barrels per day. Although Dangote stated in an interview section with the Financial Times that the refinery will begin operation in December 2023 and is expected to produce 350,000 barrels daily, the first half of the refinery's target.

The Pipeline Infrastructure at the Dangote Petroleum Refinery is considered the largest worldwide, with 1,100 kilometers to handle 3 Billion Standard Cubic feet of gas daily. Dangote Refinery has a 435MW Power Plant that can meet the total power requirement of Ibadan DisCo.

The refinery will meet 100% of the Nigerian requirement for all refined products and have a surplus of each product for export. Dangote Petroleum Refinery is a multi-billion dollar project that will create a market for $21 billion per annum of Nigerian crude. It is designed to process Nigerian crude oil with the ability to process other crudes.

Dangote Refinery will process various light and medium grades of crude oil to produce Euro-V quality clean fuels, including gasoline, diesel, jet fuel, and polypropylene.

In August, Nigeria’s Federal Executive Council (FEC) approved the acquisition of a 20% minority stake in the project by the state-owned Nigerian National Petroleum Corporation (NNPC) for $2.76 billion, sources report.

The Dangote refinery, an integrated refinery and petrochemical project, aims to create 9,500 direct and 25,000 indirect jobs.

What Is the Importance of the Dangote Refinery to Nigeria?

The importance of the Dangote refinery in Nigeria is that it will reduce the country's dependence on the importation of refined fuel products due to the lack of domestic refineries in and around its borders. The reliance on the importation of refined fuel has cost the FG billions of dollars to ensure adequate petroleum products are available. With the commencement of the Dangote refinery, the government will save those funds and use them in areas lacking funding.

Another vital aspect of the Dangote refinery in Nigeria is that it will create job opportunities for thousands of youth there. According to statistics, the integrated refinery and petrochemical project aims at creating 9,500 direct and 25,000 indirect jobs.

The Dangote refinery has 37 billion barrels of proven oil reserves. The Dangote refinery will double Nigeria’s refining capacity and help meet the increasing domestic fuel demand while generating foreign exchange through exports.

Where Is the Dangote Refinery Located?

The Dangote refinery is located on a 2,635-ha parcel of land on the Lekki Free Zone near the Lekki Lagoon, along the coast of the Atlantic Ocean.

The geographical location of the Dangote refinery is okay for the smooth transshipment of refined petroleum products to international markets.

However, it was reported that Lekki was not the site plan for the refinery but Niger Delta, but the region kicked against it because he was from the North. This was the reason for the delay of the refinery because Aliko Dangote unveiled early plans for the refinery in September 2013, where he said that he had secured about $3.3 billion in financing for the project.

Following the change in location to Lekki, construction of the refinery did not begin until 2016.

How Did Aliko Dangote Get Funds to Complete the Dangote Refinery?

A group of local and international banks led by Standard Chartered Bank had agreed to provide Aliko Dangote with a $3.3 billion syndicated loan facility for the Dangote refinery project.

According to Forbes results, Aliko Dangote is the wealthiest man in Africa with a net worth of $10.5 billion, so taking $20 billion out of Dangote's net worth now will leave the richest man in a debt of -$9.5 billion with nothing at his disposal. As far back as 2013, Dangote's net worth was $16.1 billion, so it wasn’t possible to finance such a massive project.

Additionally, the United States Trade and Development Agency is providing an N251.3 billion ($0.997 million) training grant for human resource development for the refinery operation, aside from other loans that were kept private.

When Will the Dangote Refinery Start Production?

The Dangote Oil Refinery was said to be set to begin fuel production as the first crude shipment arrived at the facility on December 7, 2023.

This was confirmed in a report by S&P Global, which stated that the OTIS tanker, carrying 950,000 barrels of Nigeria’s Agbami crude, set sail on December 6.

S&P Global added that the tanker is en route to Lekki, Lagos State, the nearest land port to Dangote’s offshore crude receiving terminal.

When Will the Dangote Refinery Be Listed on NGX?

Aliko Dangote, the President of Dangote Group, has revealed plans to list the $20 billion Dangote Petroleum Refinery on the Nigerian Exchange (NGX) as the refinery prepares to start operations in December with a daily production volume of 350,000 barrels. However, the time when the company will be listed on the NGX has yet to be announced, but we hope sooner.