Nigeria's Dangote Wants to Set up Trading Arm for Lagos Mega Refinery
03.05.2024 By Tank Terminals - NEWS

March 5, 2024 [Reuters]- Africa’s richest man Aliko Dangote is planning to set up an oil trading arm, likely based in London, to help run crude and products supply for his new refinery in Nigeria, six sources familiar with the matter said.

 

The move would reduce the role of the world’s biggest trading firms, which have been negotiating for months to provide the refinery with financing and crude oil in exchange for products exports. The giant 650,000 barrel-per-day refinery is set to redraw global oil and fuel flows and the trading community is closely watching the way it will operate.

Dangote, whose wealth is estimated by Forbes at $12.7 billion, did not reply to several comment requests.

BP, Trafigura and Vitol among others have met Dangote in Lagos and London in recent weeks to offer loans for the some $3 billion in working capital the refinery needs to buy large amounts of crude, trading sources told Reuters.

The traders asked the refinery to repay loans with fuel exports but so far they have signed no deals as Dangote worries they would reduce his control of the project – and potentially his profit, the sources said. Dangote has also met state-backed firms in his search for cash and crude.

“He is going to try and do it himself,” an industry source told Reuters. Sources told Reuters the new trading team will be led by ex-Essar trader Radha Mohan. He joined Dangote in 2021 as director of international supply and trading, according to his Linkedin profile. Two sources said the team was in the process of hiring two new traders.

The refinery took nearly a decade to complete — and came in at a cost of $20 billion, some $6 billion over budget.

The plant has refined around 8 million barrels of oil between January and February and will take months to get to full capacity. So far, Vitol has prepaid for some product cargoes to help the refinery buy crude, while Trafigura has swapped some crude oil in exchange for future fuel cargoes, sources with knowledge said. Geneva-based Vitol and Trafigura declined to comment.

Free Trial: Access 13,300 Tank Terminal and Production Facilities

13,300 tank storage and production facilities as per the date of this article. Click on the button and register to get instant access to actionable tank storage industry data

Becht Explores High-Temp Corrosion in Renewable Diesel & Aviation Fuel Production
04.15.2024 - NEWS
April 15, 2024 [Storage Terminals Magazine]- In recent years, the production of renewable diesel ... Read More
Niger and China Sign Crude Oil MOU Worth $400 mln, Says Niger State TV
04.15.2024 - NEWS
April 15, 2024 [Reuters]- Niger has signed a memorandum of understanding with Chinese state-owned... Read More
Uzbekistan Chases Chemical Hub Dream with Chinese Polymer Tech
04.15.2024 - NEWS
April 15, 2024 [Nikkei Asia]- An ambitious economic transformation effort gaining steam in Uzbeki... Read More
Astrid Maersk Arrives in Shanghai for First Green Methanol Bunkering in China, in Partnership with SIPG
04.15.2024 - NEWS
April 15, 2024 [Hellenic Shipping News]- Maersk, a global leader in integrated container logistic... Read More