Dangote Refinery promises a new milestone for the Nigerian Oil & Gas industry. The refinery, headed by Africa’s richest man, Nigerian business Alhaji Aliko Dangote, is set for completion in 2019, and could bring an end to refined petroleum products.
The $11 billion refinery promises to produce 650 000 barrels of refined petroleum a day in a bid to meet the country’s need for refined petroleum products, as well as to export to other countries. This will greatly save on import costs. According to the Nigeria Bureau of Statistics, Nigeria spent N2.59 trillion on importing refined petroleum in 2016. Almost 80% of their petroleum products is imported. This, despite Nigeria being Africa’s largest crude oil producer, and 8th largest in the world. As a result, the country has often faced fuel shortages, with their current refineries producing far below their instilled capacity.
The Benefits
According to its founder, Aliko Dangote, “This is the biggest industrial site anywhere in the world from the fertiliser, petrochemical and refinery plants”. The refinery will further diversify Nigeria’s resource base. Dangote continues by stating that ““Our refinery will be 1.5 times the capacity of all the existing four refineries in the country even if they are working at 100 per cent capacity”. The refinery is an integrated petrochemical complex, in which it will refine crude oil to petroleum products. In addition, it will have petrochemical and fertiliser plants. The fertiliser plant will produce 2.8 million metric tonnes of assorted fertiliser, while the gas plant will produce three million cubic metres of gas per annum. The refinery will also have the largest sub-sea pipeline infrastructure in the world with capacity to handle three billion cubic metres of oil annually. The project will be located in the Lekki Free Trade Zone in Lagos, Nigeria.
Vice President Yemi Osinbajo described the project as an incredible industrial undertaking, the largest and most ambitious on the continent. It will be the second biggest refinery in the world after the Jamnagar Refinery in Gujarat, India. The refinery is promised to not only benefit Nigeria, but other countries too. The African Export-Import Bank, Afrixembank, will be investing in the refinery, saying that “The impacts of the projects are not going to be felt in Nigeria alone but across Africa, especially West Africa. So for us it’s a strategic partnership we are building. If we help them to impact lives across the continent, they will equally help in delivering on our mandate to meet the objective of Afreximbank”.
Dangote said that the project would save the country about $7.5 billion annually in foreign exchange being used to import petroleum products and also generate $5 billion foreign exchange earnings annually. Furthermore, it will greatly aid in job creation, promising 100 000 employment opportunities. In addition, the price of petrol products will lower considerable. As such, this refinery promises great potential for the Nigerian Oil & Gas industry, as well as its economy.
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