The Dangote Petroleum Refinery is set to start producing Automotive Gas Oil, also known as diesel, and JetA1 or aviation fuel in January 2024, while the production of Premium Motor Spirit, popularly called petrol, is being delayed by the supply of crude oil in installments.
It was gathered on Sunday that the facility would require a minimum of six million barrels of crude oil to kick-start the full production of refined petroleum products including AGO, PMS, Jet A1 and Dual Purpose Kerosene, otherwise called kerosene.
But what the refinery got last week was one million barrels of crude, while the remaining five million barrels would arrive at the $20bn facility in another five installments.
The Dangote Petroleum Refinery and Petrochemical Project, a subsidiary of Dangote Industries Limited, is a 650,000 barrels per day crude oil refinery, located in Dangote Industries Free Zone, Ibeju-Lekki, Lagos, Nigeria.
Dangote Petroleum Refinery with the capacity to refine 650,000 barrels of crude oil per day covers an area of approximately 2,635 hectares and is located in the Lekki Free Trade Zone in Lagos.
On November 2, 2023, The PUNCH reported that the failure to supply crude oil to domestic refineries, including the multi-billion dollar Dangote refinery, stalled the production of refined petroleum products at the facilities.
The report also stated that the lack of crude oil supply came as the 650,000 barrels per day Dangote Refinery in Lagos missed the October production projection it had earlier set.
It pointed out that the October production target miss made it the second time in 2023 that Dangote Refinery would raise hopes in Africa, especially Nigeria, of a possible end to petrol importation.
Following The PUNCH’s report, the Nigerian National Petroleum Company Limited swiftly declared the next day November 3, 2023, that it was set to provide six million barrels of crude oil to the Dangote Refinery. It, however, has yet to do so.
But on Friday, the management of Dangote Refinery confirmed the receipt of one million barrels of crude oil, adding that this would lead to the production of refined products at the facility.
“In a major step towards boosting Nigeria’s domestic refining capacity and attaining energy security (self-sufficiency), Dangote Petroleum Refinery and Petrochemicals plant has purchased one million barrels of Agbami crude grade from Shell International Trading and Shipping Company Limited, one of the largest trading companies in Nigeria as well as globally, trading over eight million barrels of crude oil per day,” the oil firm had stated.
But when contacted on Sunday to confirm whether the company would start pumping out refined PMS based on the one million barrels of crude that it received on Friday, an official of the firm stated that what Nigerians should expect in January would be diesel and aviation fuel.
Six million barrels
The official explained that the facility required a minimum of six million barrels of crude to commence the full production of refined petroleum products, but what it got last week was only one million barrels.
“For a 650,000bpd capacity refinery, it requires a minimum of six million barrels to start production, and what we have done now is to receive one million barrels and it is being discharged,” the impeccable source, who pleaded not to be named due to lack of authorisation to speak on the matter, stated.
“So it is just one million barrels for now, and that means we need to take it in installments for six times, which is six installments of one million barrels each,” the source added.
The official, however, stated that the one million barrels would lead to the production of diesel and aviation fuel, stressing that PMS, kerosene and other refined products would come as the company gets more crude cargoes.
“Ultimately, what that (the one million barrels receipt) means is that by January, maybe in the second week, we should start having diesel, after which aviation fuel will come before we now cascade to PMS,” the source stated.
In the statement from Dangote Refinery on the receipt of its maiden crude cargo, the company stated that the cargo from Shell International Trading and Shipping Company Limited contained one million barrels from Agbami and sailed to Dangote Refinery’s Single Point Mooring, where it was discharged into the refinery’s crude oil tanks.
“The maiden one million barrels, which represent the first phase of the six million barrels of crude oil to be supplied to Dangote Petroleum Refinery by a range of suppliers, should sustain the initial 350,000 barrels per day to be processed by the facility.
“The next four cargoes will be supplied by the NNPC in two to three weeks and the final of the six cargoes will be supplied by ExxonMobil.
“This supply will facilitate the initial run of the refinery as well as kick-start the production of diesel, aviation fuel, and LPG, before subsequently progressing to the production of Premium Motor Spirit,” the company stated.
It said this latest development would play a pivotal role in alleviating the fuel supply challenges faced by Nigeria as well as the West African countries.
The firm stated that the facility was designed for 100 percent Nigerian crude with the flexibility to process other crudes, adding that the 650,000 barrels per day refinery could process most African crude grades as well as Middle Eastern Arab Light and even United States Light tight oil, as well as crude from other countries.
“Dangote Petroleum Refinery can meet 100 percent of Nigeria’s requirement of all refined products, gasoline, diesel, kerosene, and aviation jet, and also have a surplus of each of these products for export.
“The refinery was built to take crude through its two SPMs located 25km from the shore and to discharge petroleum products through three separate SPMs. In addition, the refinery has the capacity to load 2,900 trucks a day at its truck-loading gantries.
“Dangote Refinery has a self-sufficient marine facility with the ability to handle the largest vessel globally available. In addition, all products from the refinery will conform to Euro V specifications.
“The refinery is designed to comply with US EPA, European emission norms, and (defunct) Department of Petroleum Resources emission/effluent norms as well as African Refiners and Distribution Association standards,” the company stated.
The President, Dangote Group, Aliko Dangote, was quoted as saying, “We are delighted to have reached this significant milestone. This is an important achievement for our country as it demonstrates our ability to develop and deliver large capital projects.
“Our focus over the coming months is to ramp up the refinery to its full capacity. I look forward to the next significant milestone when we deliver the first batch of products to the Nigerian market.”
On his part, the Country Chairman, Shell Companies in Nigeria, Osagie Okunbor, said, “We welcome the startup of a refinery that is designed to produce gasoline, diesel, and low-sulphur fuels for Nigeria and across West Africa and are happy to be enabling it.”
A document detailing some of the attributes of the facility, obtained by one of our correspondents, showed that tank farms in the facility have a total of 177 tanks with a cumulative capacity of 4.74 billion litres, and total tanker loading of 2,900.
For product evaluation, the report stated that the dispatch facilities by road (tanker) for the products (gasoline, diesel, kerosene/jet fuel, propane and slurry) was up to 80 percent of the total production and up to 75 percent through marine facilities.
It stated that the plant would operate a year-round operation for road loading operations, adding that on logistics, over 1,029 trucks would improve the capacity of the local logistics.
On employment generation, the document stated that over 100,000 indirect employment would be created at retail outlets, adding that 26,716 filling stations and 129 depots would come onstream in Nigeria.
It stated that the facility would ensure the ease of availability of products and help open up service stations, while 16,000 trucks for transportation would create additional jobs.
“In terms of employment generation, over 30,000 are currently working at the petroleum refinery project site, through various contractors. When operational, the petroleum refinery is going to generate over 100,000 direct and indirect jobs for Nigerian youths,” the company stated in the document, adding that the refinery would create a $21bn market annually for Nigerian crude.
The facility has its own power plant with a capacity of 435 megawatts.
“The refinery has its own dedicated steam and power generation system with adequate standby units for reliable/uninterrupted utility supply to operating plants,” the company stated in the document.
It stated that Dangote Industries had developed a port and constructed quays with a load-bearing capacity of 25 tonnes/sq.m to bring Dimensional Cargoes close to the site directly to handle liquid cargoes.
“The Jetty is situated at a distance of 12.3km from the refinery thereby effectively reducing the travel time,” it stated.
Otedola commends refinery
Reacting to the development, billionaire businessman, Femi Otedola, said Dangote Refinery would champion energy security in Nigeria.
Otedola said this on Sunday on his X (formerly Twitter ) handle, where he congratulated Africa’s richest man and his “bestie,” Aliko Dangote, on the commencement of production of the refinery, which was commissioned in May, before the expiration of the tenure of the former president, Muhammadu Buhari.
He said, “By meeting our requirements for all refined petroleum products, it will champion energy security and independence for our nation and act as a catalyst for a new era of prosperity for the subcontinent. It promises economic transformation for Nigerians today and for generations to come.”
Otedola started off his piece on the social media platform by congratulating Dangote.
“I heartily congratulate my bestie #AlikoDangote as the 8th Wonder of the World – the $20bn #DangoteGroup Refinery – officially commences production. The Dangote Petrochemical Complex, which consists of the world’s largest single-train 650,000 barrels per day petroleum refinery, one million metric tonnes of polypropylene per annum facility, and two of the world’s largest fertiliser trains, with a capacity of producing three million tonnes of urea, is much more than just an industrial milestone; it’s a testament to the visionary leadership and relentless pursuit of excellence of one of Africa’s finest and most dogged patriots,” he said.
Providing more details, Otedola revealed that he had a front-row seat in the conceptualisation and process of establishing the refinery, saying “I am familiar with the sleepless nights you’ve had to work through over the last decade to bring this dream to fruition.”
He added, “This refinery is a beacon of hope for millions of Nigerians and Africans. It is also at the vanguard of championing environmental sustainability. With its carbon capture technologies and storage processes, it will capture up to 90 percent+ of the CO2 emitted and also play a significant role in reducing well-to-tank carbon emissions from crude oil maritime transportation, thereby playing its own role in helping Nigeria meet its target for net-zero emissions by 2060.
“The refinery re-circles 100 percent of its water. The heat coming out of the process is fully captured to produce 50MW of power. Dangote is also producing Euro-5 to replace the bad Euro-5 that has been dumped in Africa for a long time.
“Shipping 65,000 barrels per day of crude out of Nigeria and 650kbpd in refined products to Nigeria and nearby countries which is 480 ships of one million barrels per day will save 1.5m to 2.5m tonnes of CO2 emissions. This will help the environment.”
Also speaking on the development, the National Public Relations Officer, Chief Ukadike Chinedu, said the move by the management of Dangote Refinery was commendable.
“We are optimistic to see the commencement of refined products from the facility and we are ready to party Dangote in ensuring the distribution of these refined products across the country,” he stated.