Nigeria’s $20 billion Dangote plant has had to increase imports due to insufficient domestic supplies
Nigeria’s Dangote Refinery is in negotiations with Libya to secure crude oil for its 650,000 barrels per day (bpd) plant, Reuters reported on Sunday, citing Devakumar Edwin, a senior executive of the company.
The move comes amid insufficient domestic supplies for the $20 billion facility, as Africa’s largest oil producer faces theft, pipeline vandalism, and inadequate investment.
The refinery located outside of Lagos was built by the continent’s richest man, Aliko Dangote, with the aim of increasing Nigeria’s oil refining capacity and ending the country’s reliance on imported fuels. However, since beginning operations earlier this year, the plant has resorted to importing crude from countries including Brazil and the US, its owner has said.
During a tour of the facility on Saturday, Aliko Dangote stated that the refinery had only received five crude cargoes from state oil firm NNPC since it was launched in January, instead of the expected 15.
He said the refinery, which currently produces diesel and aviation fuel, plans to hit at least 60% of its installed capacity by September and reach 550,000 barrels a day by the end of the year.
Edwin, Dangote Industries Group’s vice president in charge of oil and gas business, told Reuters: “We are talking to Libya about importing crude. We will talk to Angola as well, and some other countries in Africa.”
He reportedly declined to provide details about the talks with Nigeria’s African neighbors but claimed that international traders and oil companies were among the largest buyers of Dangote’s gasoil, much of which was exported.
“The biggest offtakers are the two big traders Trafigura and Vitol and BP and, to some extent, even TotalEnergies. But all of them are saying they are taking it to offshore,” Edwin said.
Meanwhile, the company is at odds with the government over claims made by the Nigerian Midstream and Downstream Petroleum Regulatory Authority that the sulfur content of Dangote’s gasoil exceeded the mandatory limit of 200 parts per million (ppm). Its owner has also been accused of attempting to establish a monopoly in the West African nation with his refinery, after allegedly requesting that authorities suspend imports of diesel and aviation fuel.
Dangote has denied the allegations, calling them “very disheartening.”
