After a series of prolonged delays, the Dangote Refinery, a colossal $19 billion is on the verge of kickstarting fuel production with the arrival of the first crude shipment. This significant development marks a crucial milestone for the country’s oil industry.
Industry sources and tanker tracking data, as reported by S&P Global on its website, reveal that the OTIS tanker, carrying a 950,000 barrel cargo of Nigeria’s Agbami crude, embarked on its journey on December 6. Currently en route to Lekki, the nearest land port to Dangote’s offshore crude receiving terminal, the tanker is expected to arrive yesterday lDecember 7 around 8 pm, symbolizing the initiation of crude supplies for the refinery’s operations.
This maiden crude supply, orchestrated by the state-owned Nigerian National Petroleum Company (NNPC) through the chartered Suezmax tanker, holds profound significance for Dangote’s state-of-the-art refinery as it gears up for production, according to insights from a West African oil trader.
Despite the official completion of the refinery in May, the absence of domestic crude feedstock had been a roadblock to oil product manufacturing. In a recent move, the NNPC, holding a 20% stake in the refinery, inked an agreement to supply 6 million barrels of crude oil as feedstock in December, signaling a concerted effort to jumpstart operations.
Agbami, operated by Chevron, takes center stage as a major deepwater development in Nigeria, contributing approximately 100,000 b/d in the central Niger Delta. Known for its light sweet crude qualities, Agbami is set to play a crucial role in the refinery’s production.
Further shipments from various Nigerian offshore fields to the refinery, chartered by NNPC, mark the beginning of a series of scheduled crude supplies throughout this month, providing a promising outlook for Dangote’s operations.
Situated on the outskirts of Lagos, Nigeria’s commercial hub, the Dangote Refinery faced recurrent delays since its announcement in 2013. The refinery, designed to process multiple crudes concurrently, holds the promise of transforming Nigeria’s oil industry landscape. It aims to process three Nigerian crude grades — Escravos, Bonny Light, and Forcados, contributing to the country’s ambition to reduce reliance on gasoline imports.
With an anticipated 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 upon reaching full operational capacity, the refinery’s commencement sparks hope for Nigeria’s vision to achieve self-sufficiency in gasoline production by the 2040s.
While Dangote officials foresee an initial output of 370,000 b/d, focusing on jet fuel and diesel production, industry analysts cautiously project the refinery to achieve its full operational capacity around mid-2025, acknowledging potential delays that still loom on the horizon.