Dangote Industries is Set to Open Africa’s Largest Oil Refinery

By Richard Adorsu-

Photo Credit: Dangote Group

NEW AFRICA BUSINESS NEWS (NABN) Accra GHANA- Following years of delays and regulatory hurdles, Dangote Industries Limited is preparing for a ceremonial opening this month at its Lekki Refinery in Lekki, Nigeria, which will be the biggest refinery in Africa. The company expects the facility’s crude distillation unit (CDU) will begin commercial operations by the end of June. Industrial Info is tracking more than US$14 billion worth of active projects at the Lekki Refinery, which accounts for just less than half of the total investment in all active refining projects across Nigeria.

The Lekki Refinery will increase Nigeria’s refining capacity to 3.24 million barrels per day (BBL/d). Once commissioned, its single, 650,000-BBL/d CDU will be the biggest in the world, by capacity. Currently, the largest is a 430,000-BBL/d CDU at the Yanbu Refinery in Saudi
Arabia, which was commissioned in 2015.

Subscribers to Industrial Info’s Global Market Intelligence (GMI) Metals & Minerals project and plant databases can learn more about the Lekki Refinery in a plant profile, and can click here for a list of detailed reports for projects at the facility.

Commercial startup of the Lekki Refinery has been delayed due to operational issues at its power plant, which kept its crude unit from running. But the company now plans to start up the facility’s boilers and gas turbines by June, although its downstream units are not expected to begin operations until later this year. Other units might not begin operations before the end of 2024.

The refinery’s output will be mainly gasoline, with some diesel and jet fuel.

“The market is watching the startup of this plant very closely, especially as it pertains to how much crude it will process,” said Hillary Stevenson, the senior director of Energy Market Intelligence at IIR Energy. “Our research shows that the plant is expected to operate at 50%
capacity until its downstream units are operational, which may not be until 2025.”

The Nigerian National Petroleum Company (NNPC), which purchased a 20% stake in the Lekki Refinery in 2021, plans to halt imports of refined products into Nigeria before the end of this year. Mele Kyari, the chief executive officer of NNPC, told reporters in August that the African nation’s projected output from Lekki and other state-owned refineries will “eliminate any importation of petroleum products into this country.”

NNPC also has the right to purchase 20% of production from the plant, Kyari said.

The project is among nearly two dozen grassroot refineries that are under construction globally, which will help to make up for pandemic-related refinery rationalizations and keep pace with rising global fuel demand.

One of NNPC’s own refineries, the 125,000-BBL/d Warri Refinery in Warri, Nigeria, began a rehabilitation and restart project in April that is expected to wrap up in the first quarter of 2024.

NNPC expects the project will increase the Warri Refinery’s nameplate capacity utilization from 50% to 90%. Subscribers can learn more from a detailed project report and plant profile.

Kyari said NNPC has contracted sales of at least 330,000 BBL/d for the next 20 years, according to the Financial Post.

For New Africa Business News Richard Adorsu Reports,  Africa Correspondent