The $20 billion Dangote Refinery has finalized plans to import crude oil from the United States in the coming months.
Already, traders acquainted with the subject have revealed that Trafigura Group has sold two million barrels of WTI Midland to the Dangote refinery for delivery by the end of February 2024.
According to Bloomberg, this is the first time the refinery would purchase non-Nigerian crude, and the exponential expansion in US oil supplies over the last decade has changed the global market, expanding its impact to places such as Asia.
Nigeria, whose economy is strongly reliant on petroleum exports, is especially affected by these transatlantic supplies.
The massive 650,000 barrel-per-day oil refinery began functioning earlier this month. Initially targeting a processing rate of 350,000 barrels per day, the refinery intends to progressively increase production to full capacity.
While the refinery predominantly gets local crude through a supply arrangement with the trading arm of the state-owned NNPCL, it recently received its first shipment of Nigerian Agbami crude, which was enabled by a Shell trading unit. Amenam, Bonny Light, and CJ Blend streams from Nigeria were among the subsequent supplies.
The Dangote Refinery appeared poised to start producing refined petroleum products upon receiving the sixth batch of crude oil barrels supplied by the Nigeria National Petroleum Corporation Limited (NNPCL) a few weeks ago.
The recent delivery of one million barrels of Agbami crude oil via MT ALMI SUN marked the completion of the initial scheduled consignment of six million barrels destined for the Dangote facility, signaling the imminent start of operations for the world’s largest single-train refinery.
Approximately a month earlier, the Dangote Refinery had received the first batch of one million barrels of Agbami crude oil from Shell International Trading and Shipping Company Limited (STASCO), a major trading company in Nigeria and globally, with a daily trading volume exceeding 8 million barrels of crude oil.
It’s worth noting that Akin Omole, the Managing Director of Dangote Ports Operations, had previously informed the media at the Dangote Quay in Ibeju-Lekki, Lagos, that the refinery would be ready to commence operations once the six million barrels of crude oil had been delivered.
Omole said: “Once the six million barrels are fully delivered, it will facilitate the initial run of the refinery as well as kick-start the production of diesel, aviation fuel, and Liquefied Petroleum Gas (LPG) before subsequently progressing to the production of Premium Motor Spirit (PMS).”
This recent development will be instrumental in addressing the fuel supply difficulties encountered by Nigeria and neighboring West African nations.
Engineered to utilize 100% Nigerian crude oil while also possessing the capability to process various other crude types, the Dangote Petroleum Refinery, with its daily capacity of 650,000 barrels, is versatile enough to handle most African crude grades, Middle Eastern Arab Light, as well as US Light tight oil, among others.
The Dangote Petroleum Refinery is poised to fulfill 100% of Nigeria’s demand for all refined products, including gasoline, diesel, kerosene, and aviation jet fuel, and additionally boasts a surplus of each of these products available for export.
