Excitement as Nigeria’s Dangote refinery starts production

The Dangote Oil Refinery, the largest on the continent at 650,000 barrels per day (bpd), has begun producing diesel and aviation fuel, the company said on January 13. The refinery, owned by billionaire Aliko Dangote, has been built at a cost of about $20 billion – more than enough to fund Uganda’s national budget for a year – and is widely expected to solve Nigeria perennial petroleum challenges. Africa’s most populous nation spends more than $23 billion a year to import petroleum for its 250 million people. The prices of petrol have more than tripled from a year ago after the government scrapped fuel subsidies in Africa’s largest crude oil producer. The refinery is also expected to make the country a net fuel exporter of gasoline, diesel, kerosene, and aviation jet fuel to neighbouring West African States. The facility has already received millions of barrels of crude oil and is expected to start with a capacity of about 350,000 bpd, but it should be able to meet the country’s entire domestic fuel demand, as well as exporting refined products, by the end of 2025. The refinery is supplied with crude oil via the largest sub-sea pipeline infrastructure in the world (1,100 km long). At a complexity of 10.5, the Dangote refinery is reportedly more complex than most refineries in the United States (average 9.5) or Europe (average 6.5). The eventual launch of the long-awaited project will be an encouragement to Uganda, which is planning to build its own 60,000 bpd refinery worth $4 billion to process its crude oil in Hoima. The Government of Uganda is still seeking a lead investor for the project in which several East African Community partner States have also expressed interest in holding shares.