Dangote Refinery Receives First Crude Supply, Set to Revolutionize Nigeria’s Oil Industry
According to the group’s executive director Devakumar Edwin, the Dangote Refinery is scheduled to start refining petrol by November 30, 2023, and diesel and jet fuel operations by October 2023.
The refinery will receive its first crude shipment in two weeks, and in October 2023, it will start producing up to 370,000 barrels per day of diesel and jet fuel, according to Edwin, who spoke with S&P Global Commodity Insights on Monday.
Edwin also mentioned that the refinery would start a gradual rise in petrol output with the goal of reaching a remarkable 650,000 barrels per day by November 30. “Right now, I’m ready to receive crude,” he said, emphasising the refinery’s willingness to receive crude oil. All we have to do is wait for the first ship. And so, as soon as it comes in, we can start.”
This Is The Month Port Harcourt Refinery Will Begin Operations – FG Reveals
During his interaction with S&P, Edwin made it clear that the Nigerian National Petroleum Corporation Limited had previously committed its crude oil to another business on a forward basis, which resulted in a little delay. This explanation explained the change in the initial timeframe. The refinery would soon run solely on Nigerian crude oil starting in November 2023, he claimed, and the disruption was only temporary.
Because it is located in a free trade zone outside of Lagos, he pointed out that US dollars rather than naira will be used to pay for the Nigerian oil. Due to its equity interest, the NNPCL will deliver certain petroleum at discounted rates.
Edwin said that the Dangote refinery can process the majority of African crudes as well as Middle Eastern crudes, excluding heavy Angolan grades.
He said, “We can take even some of the Russian grades… if the global system opens up to allow us to receive them. Basically, if you look at our production profile, 50% of my production will meet 100% of the requirements of the country.
Local Refining Will Reduce N70 On litre Of Petrol – Oil Marketers
“Excess gasoline – which will be 10 ppm sulfur Euro 5 quality — will be exported to other African markets as well as the US and South America, although the volumes will be relatively small. Meanwhile, jet fuel will be exported to Europe and diesel will be sold in sub-Saharan Africa.”
S&P also quoted Edwin as saying the refinery would be “enormously beneficial to the country” by establishing a reliable supply of “environmentally-friendly” refined products and bringing “a huge amount of foreign exchange into the country.”
Furthermore, Edwin pointed out that the refinery would be crucial in easing the problems with fuel supply that import-dependent West Africa was facing. These problems had been made worse by Nigeria’s recent elimination of fuel subsidies, which had resulted in a booming black market for illegal petrol due to price swings.
He also stated that the profits from the refinery’s operations would be used to support additional construction, demonstrating Aliko Dangote’s dedication to Nigeria.
Fuel Scarcity: FG Orders NNPC To Reduce Petrol Price
“The money will be coming back in, and it will go for further investments,”
“[Aliko Dangote] is from Nigeria and his focus is always on Nigeria,” Edwin said.
Follow us on Facebook
Peter Obi, the Labour Party’s (LP) presidential candidate for the 2023 elections, has called the Dangote Refinery’s opening “another milestone toward the New Nigeria.”
The former governor of Anambra State expressed his opinion that the Dangote Refinery will have a significant positive impact on the economy of the country in a series of tweets on Monday night via his verified Twitter account.
When fully operational, the refinery, according to Obi, should be able to satisfy domestic demand for petroleum products in Nigeria and assist the country in saving the vital foreign currency currently used for their importation.
LATEST: Peter Obi Attends Dangote Refinery Commissioning (Video)
He pointed out that Nigeria will reposition itself as a major player in the downstream petroleum sector of the global market by supplying the excess to the international markets. Nigeria has transitioned from consumption to production.
Obi also expressed his gratitude for the invitation to the Dangote Refinery’s Commissioning, the largest single-train petroleum refinery in the world.
He wrote: “Today, I honoured the invitation to the Commissioning of the Dangote Petroleum Refinery and Petrochemicals in Lagos. This is the World’s Largest Single Train Petroleum Refinery. I congratulate Alhaji Aliko Dangote for this world-class project which I believe will be very beneficial to Nigeria’s economy.
“The refinery with a capacity of 650,000 barrels of crude oil per day when operated maximally, is expected to meet Nigeria’s domestic demand for petroleum products and help Nigeria to save the much-needed foreign exchange currently spent on the importation of such products.
‘Tsunami Himself’ – Ooni Of Ife Hails Peter Obi At Dangote Refinery Inauguration (Video)
“By supplying the surplus to the International markets, Nigeria will reposition itself as a key player in the downstream petroleum sector of the global market. In moving Nigeria from consumption to production, I have always argued for greater private sector participation in the economy as exemplified by the Dangote Group. I believe the Dangote Refinery will be very beneficial to the nation’s economy.
“By moving Nigeria from a net importer to a net exporter of petroleum products, this refinery will create numerous jobs and generate needed foreign exchange inflow.
“This refinery is another milestone towards the New Nigeria, to which I am committed. That new nation will be an enabling environment for a booming private sector that will see the rise of many micro, small, and medium-scale businesses that will boost the nation’s economy and foster increased productivity among our people.”
Follow us on Facebook
The Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Mr. Mele Kyari has said that the decision of the Corporation to invest in Dangote Oil Refining Company will guarantee energy security for the country.
Kyari said this on Tuesday during an interview on ‘Good Morning Nigeria’ show on the Nigeria Television Authority.
He said that the Corporation will be taking over at least 20 percent equity stake in Dangote Refinery, adding that the funding for the acquisition would be coming through borrowing and not from the Federal Government.
EFCC Demands Inspection On Ex-NNPC GMD Yakubu’s Cash
Kyari said that the loan to be borrowed to finance the acquisition of the 20 per cent stake in Dangote Refinery would be repaid on the back of the cashflow to be generated from the investment.
The NNPC GMD explained that with the Dangote Refinery projected to deliver about 50 million liters of petrol to the country, coupled with the take-off of the Port Harcourt, Wari and Kaduna Refineries’ project, Nigeria would become a hub of petroleum products in the continent.
He said, “This Refinery will deliver at least 50 million liters of PMS into the Nigerian market and there is no country anywhere that will sit and watch such enormous investments that is related to energy security anywhere in the world to look by the side. No one does this.
“We as a National Oil Company has the responsibility to ensure energy security for this country and the meaning of this is that you must secure the supply sources. And we have been trying to fix our refineries, we have awarded the contract for the fixing of the Port Harcourt Refineries well ahead of planned schedule.
On Petrol Price Increase In July – NNPC Speaks
“The Warri and Kaduna Refinery, we will issue the APC very soon and hopefully before the end of July. That will come parallel and we will deliver all of them around the same time. So the net effect is that you are going to have a petroleum product supply hub for West Africa.
“That means with the NNPC Refineries in place and Dangote Refineries operating and with other initiatives that we are making, we are going to have a massive hub of petroleum production in West Africa.
“This will change the flow of product supply in the whole globe.”
Kyari explained further that Nigeria will get value from the investments, stating that the NNPC is currently expanding its portfolios to give value for Nigeria in various sectors of the economy such as fertilizer and methanol.
The NNPC GMD added, “This investment is really a good deal for us because it will increase our portfolio and boost the size of our balance sheet.
NNPC GMD: Nigeria To Rely On Oil For Next 30 Years
“We are following international approved processes. No bank is going to give you a kobo if you don’t follow these processes. We are not taking government money to buy this equity. We are going to borrow on the back of the cashflow that will come from the Refinery, on the back of our transactions, equity and dividend that will come from this business.
“So, we are taking advantage of a business opportunity, I’m not sure that Mr. Dangote wants us to do this but this is what we want to do.”
Kyari noted that based on the governance structure of the NNPC, and in line with the due process policy of the Federal Government, the Dangote acquisition transaction would be taking to the Federal Executive for final approval.
He said, “This company (NNPC) is owned by the country and 200 million Nigerians and so we are doing this on their behalf. We will take this to the Federal Executive Council and get their endorsement because we believe this is the right thing to do. We are not exposing this country; we are making something that is beneficial for this country.
NNPC: Why All Refineries Were Shut Down By FG
“No country will do that mistake of allowing such massive project of energy proportion to run without the government having a seat on the board.”
When asked what the impact of the investments will do to the price of petrol, he said this will take away the N21 per litre price of freight from the landing cost.
He said, “When we get this Refinery working and with our 20 per cent stake, you will have a seat on the board of this company. You will have massive influence around the decision that would be made. Therefore, literally, we can say we have control of about 20 per cent of the products that will be coming out from this facility.
“When you have the Refineries working in your country, it does one thing-it takes out the cost of freight when you are buying this product from other countries. So at least N21 per liter of petroleum products will be reduced.”
Follow us on Facebook