February 7, 2022 [Vanguard] – A new African industrial giant is emerging from the Lekki coastline of Lagos, the Dangote Refinery project, an integrated refinery and petrochemical complex, which is a multi-billion dollar project that is expected to create a market for $11 billion per annum of Nigerian crude.
At full production, the complex will have an annual refining capacity of 10.4 million tonnes of gasoline, in addition to 4.6MT of diesel and 4MT of jet fuel.
It will also produce 0.69Mt of polypropylene, 0.24MT of propane, 32,000T of sulphur and 0.5MT of carbon black feed. The complex also includes a fertilizer plant, which uses by-products from the refinery as raw materials. These are huge outputs which will also immensely benefit the local market.
The Pipeline Infrastructure at the refinery is reputed to be the largest anywhere in the world, with 1,100 kilometers to handle 3 billion Standard Cubic Foot of gas per day. The Refinery alone has a 400MW Power Plant that is able to meet the total power requirement of Ibadan DisCo.The Dangote Refinery complex covers a land area of approximately 2,635 hectares, which is about six times the size of Victoria Island in Lagos.The Dangote Oil Refinery is a 650,000 barrels per day, single-train crude oil integrated refinery project located in the Lekki Free Zone in Lagos, Nigeria. With a single crude oil distillation unit, the refinery will be the largest single-train refinery in the world and Africa’s biggest oil refinery.
With a greater capacity than the total output of Nigeria’s existing refining infrastructure, the Refinery will meet 100 percent of the Nigerian requirement of all refined products and also have a surplus of each of these products for export.
Africa’s growth accelerator company — Adesina
On a recent tour of the facility, President of the African Development Bank (AfDB), Dr. Akinwumi Adesina, described is as the best industrialised project to happen to Africa, adding that the project will positively affect the economic growth and development of not only Nigeria but Africa as a continent.
Adesina stated: “I see a company that I will proudly call Africa’s growth accelerator company. With this project, we see an acceleration of how to reduce imports. We see acceleration on how to have an outbound on export; a value chain development and how to compete regionally and globally.
“I am completely blown away with what I saw here today. I can’t believe what I saw. This project will reverse the huge sum the nation spends on foreign exchange. When you look at how much we import, it is about $57 billion worth of different products and we export only about $50.4 billion, so we have to balance that with about $7 billion and talking to them here, they showed us that they can have a domestic market of about $11 billion and that is an incredible market and that will save Nigeria about $9 billion dollars a year from importing petroleum products, so this is huge for Nigeria and even for Africa as a continent.”
Fertiliser complex On the fertilizer complex, Adesina said: “This is a company that is producing three million metric tonnes of urea, which will make Nigeria totally self-sufficient. Nigeria will become a net exporter of fertilizers. It will drive productivity growth in Nigeria, prices will come down and the quality will also improve.”According to a GlobalData report, the completion of Dangote Fertiliser has made Nigeria the third-highest country in terms of capacity additions, with a capacity of 11.58 million tonnes per annum by 2030.
“Major capacity additions will be from two planned plants Dangote Group Lekki Urea Plant 1 and Dangote Group Lekki Urea Plant 2 with a capacity of 1.50 million tpy each by 2030,” it added.The Dangote Fertiliser project is reputed to be the largest Granulated Urea Fertiliser complex in the entire fertiliser industry history in the world, with an investment of $2.5 Billion capacity of 3 Million Tonnes Per Annum (TPA). The Dangote Fertiliser complex consists of Ammonia and Urea plants.
Takes off Q3 2022
President of Dangote Group, Aliko Dangote, said the refinery will start processing crude in the third quarter of 2022, as mechanical work on the project is completed, while hydro testing (at 70 per cent) is almost completed.
He said the last equipment for tidying up the project has arrived and the plant will start with a processing capacity of 540,000 barrels a day, while full production would start by the end of the year or beginning of 2023.
Dangote stated: “The refinery will commence operation by the third quarter of 2022. On the mechanical completion, we are almost finished but we have started hydro testing, almost 70 percent gone, hopefully before the end of third quarter, operation will commence. This is a major revolution. Once we finish, definitely, it will put Nigeria on the map.”
Group Executive Director, Strategy, Portfolio Development & Capital Projects, Dangote Industries Limited, Devakumar Edwin said the refinery complex, which includes a refinery, petrochemical plant, a fertilizer plant and a subsea pipeline project, is the largest single-train refinery in the world.
He said the refinery would stimulate economic development in Nigeria, adding that it can meet 100 per cent of the Nigerian requirement of all liquid products (Gasoline, Diesel, Kerosene and Aviation jet), and also have surplus of each of these products for export.“This would create a market for $11 billion per annum of Nigerian crude and foreign exchange savings/earnings of $9.9 billion. We have impacted on job creation with 3,580 Nigerian personnel on site, excluding employment by the various contractors and subcontractors at the site.
“The high volume of petrol output from the refinery would transform Nigeria from a petrol import-dependent country to an exporter of refined petroleum products,” he added.
Global assessment
Meanwhile, the International Monetary Fund (IMF), the Organization of Petroleum Exporting Countries (OPEC) and world data and analytics group, GlobalData, have expressed confidence that the Dangote Refinery will boost future capacity of global crude oil refining, in addition to improving Nigeria’s trade balance by $9.9 billion per year when it comes on stream.
In a report tagged, ‘Global Planned Refining Industry Outlook to 2023’, GlobalData projected that Dangote refinery, put at $12 billion capital expenditure (capex), will raise the oil and gas productivity rating of the continent, making Nigeria the second largest country in the world in terms of capacity additions.Similarly, the IMF said that Dangote refinery could transform the country’s petroleum industry, boost growth, turn the country into an exporter of refined products, improve balance of payments and transform regional trade patterns.
The IMF said: “With a crude oil production of almost two million barrels per day, Nigeria is Africa’s biggest oil producer and one of the largest oil exporters globally, yet only a small fraction of Nigeria’s crude oil production is refined domestically.”On its part, OPEC said that the completion of the project would reduce the importation of petroleum products in West Africa.
“Since the project is in West Africa, its implementation does not necessarily alter the situations in North and East/South Africa. What should happen, especially in West Africa, is a reduction in the need and opportunity for product imports,” it added.
A former Chief Operating Officer (Upstream) of former Nigerian National Petroleum Corporation and Chairman of Dankiri Farms & Commodities, Mr. Bello Rabiu, noted that the Dangote Refinery could save Nigeria over N264 billion annually.
According to him, the country spends over N22 billion every month on inefficiencies associated with the four inactive refineries and decrepit petroleum pipelines and depots belonging to NNPC.
“Between N11 billion and N12 billion is spent on refineries every month as well as N12 billion spent on pipelines across the country,” Rabiu stated.
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