By Jeph Ajobaju, Chief Copy Editor
Agreement reached in England by the G7 countries to end reliance on fuel and diesel-powered cars by 2030 may scuttle the plans of Dangote Refinery in Lagos to meet Nigeria’s fuel needs with surplus to export for hard currency.
When the $15 billion integrated refinery owned by Aliko Dangote is completed, it will produce 650,000 barrels per day (bpd) of oil and be the world’s biggest single-train facility.
It is expected to be completed this year after some delays and will generate 9,500 direct and 25,000 indirect jobs.
The refinery is designed to produce per day, among other items, petrol (50 million litres) of petrol and diesel (15 million litres), jet fuel (four million tonnes), besides raw material by-products from its fertilizer plant.
NNPC to acquire 20% equity stake
The Nigerian National Petroleum Corporation (NNPC) plans to acquire a 20 per cent minority equity stake in Dangote Refinery to ensure uninterrupted supply of fuel products nationwide.
ThisDay reported NNPC Chief Operating Officer, Refining and Petrochemicals, Mustapha Yakubu, as saying that discussions are ongoing with the Dangote Group for the acquisition.
“We have what we call the Greenfield refinery and the Greenfield Refining Projects Division (GRPD) of the NNPC. What we do, our strategy is to collaborate and seek strategic partnerships with private investors,” he said.
“At the moment,” Yakubu added, “we have Dangote Refinery, which is the 650,000 barrels per day capacity, plus a mini 80,000 tonnes per annum petrochemical plant.
“We are seeking to have a 20 per cent minority stake in Dangote Refinery as part of our collaboration and you know that there’s a huge quantity of crude for that refinery.
“That’s 650,000 barrels, going into a single crude distillation unit (CDU). When that comes on board, it will also wet the nation for us.”
Yakubu also disclosed that the NNPC is collaborating with African Refinery in Port Harcourt, a co-location facility, the CNCEC Chinese Group, which is interested in building two refineries in Nigeria, the Waltersmith modular plant, and Azikel refineries on condensate production.
He said despite the global push for renewables, Nigeria has a domestic and regional market for hydrocarbons and Africa will continue to rely on fossil fuels for at least the next 20 years.
Yakubu stressed that Nigeria will not fold its arms and do nothing with its hydrocarbons because the International Energy Agency (IEA) has predicted a net-zero emissions scenario by 2050.
“Today when you are bringing products into Nigeria, they disappear to neighbouring countries. There’s nowhere in countries around Nigeria that they sell fuel for less than N400 per litre. So, there’s a market.’’
Dangote Group confirms external interests in refinery
Dangote Group Executive Director, Devakumar Edwin, confirmed the quest of four oil firms, including the NNPC, for stakes in the refinery.
He said firms from Western and Middle East countries involved in trading and crude production are looking to secure crude supply agreements, a similar objective to that pursued by the NNPC.
“They are seeking to have 20 per cent minority stake in Dangote Refinery as part of collaboration … so that they can sell their crude,” Edwin told Reuters.
He said Dangote refinery is not looking for equity, adding that the company wants to be able to secure crude from the market.
Nigeria, Africa’s biggest crude oil exporter, imports virtually all of its fuel due to moribund state refineries, which has prompted the interest of the NNPC in the 650,000 bpd Dangote Refinery.
Edwin said the refinery is scheduled for mechanical completion this year with commissioning by January 2022.
Dangote, who built his fortune in cement, first announced a smaller refinery in 2013, to be finished in 2016. He then moved the site to Lekki, in Lagos, upgraded the size, and said production would start in early 2020.
The company has held talks with firms, including Vitol and Trafigura, over the supply of crude and lifting of petroleum products for sale abroad, per Reuters.
Nigeria lost its biggest customer, the United States, after it started producing shale oil. The US is now pushing into some of Nigeria’s most valued markets, Edwin said.
