Nigeria: Will Dangote Refinery Finish Nigeria’s Continuous Oil Woes?

Abuja The completion of the Dangote Refinery in 2019 will mark another milestone in the Nigerian oil and gasoline industry.

oil cracking towerThe refinery is being built by Mr Aliko Dangote, the founder of the Dangote Group of Companies and the richest man in Africa.

The $14 billion (Shs50.6 trillion) refinery will produce 650,000 barrels per day of refined petroleum products to meet all Nigeria’s wants, in addition to for export.

It holds the prospects of stopping the importation of refined petroleum merchandise by the African big.

The West African state spent N2.59 trillion to import refined petroleum merchandise in 2016, according to the Nigeria Bureau of Statistics. Mr Dangote said that the refinery tasks were primarily meant to diversify the useful resource base of Nigeria.

Capability

“That is the largest industrial site anywhere on this planet from the fertiliser, petrochemical and refinery plants.

“Our refinery will likely be 1.5 instances the capability of all the existing four refineries in the nation, even if they are working at one hundred per cent capability.

“This is the only largest refinery in the world. The petrochemical that we have now is thirteen instances larger than the Eleme Petrochemical constructed by the federal government,” Mr Dangote stated.

Performing President Yemi Osinbajo described the challenge as an unbelievable industrial undertaking, presumably the most important and most formidable on the continent.

Apart from refining crude oil, the Dangote Refinery will even have petrochemical and fertiliser plants.

An Executive Director within the Dangote Group, Mr Mansur Ahmed, mentioned the plant would process 1.Three million metric tonnes per annum of petrochemical merchandise.

The refinery will even have the most important sub-sea pipeline infrastructure on this planet, with capability to handle three billion cubic metres of oil yearly.

Location

The venture is positioned in Lekki Free Trade Zone on 2,200 hectares, an space eight occasions greater than your entire Victoria Island in Lagos.

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Based on Mr Mansur, the primary phase of the plant will likely be prepared by the end of 2017, the second by finish of 2018, whereas the third and the inauguration of the refinery shall be in 2019.

It’s regrettable that Nigeria, with large oil reserves and being the largest crude oil producer and exporter in Africa and eighth on this planet, still imports more than 80 per cent of its petroleum products.

The country usually skilled gasoline shortages as a result of poor state of 6 m diameter pressure vessel automatic welding its refineries. All of the three refineries, operated by the Nigerian Nationwide Petroleum Company (NNPC), were producing far beneath their capacity.

The Port Harcourt Refinery has 10.500 million mt/y (metric tonnes per yr) capability of refined products, but it surely was producing at lower than 20 per cent of the capability.

The Kaduna Refinery, inbuilt 1980, has capability to provide 5.5 million mt/y (a hundred and ten,000 b/d), while Warri Refinery, built in 1978, can produce 6.2 million mt/y (125,000b/d) of refined products.

With the Dangote Group on board, Nigeria will now host certainly one of the most important refineries in the world after the Jamnagar Refinery in Gujarat, India, the world’s largest, which produces 1,240,000 barrels per day.

The Dangote Refinery will be the biggest in Africa taking over from the South Africa’s Sapref Refinery, which produces 180,000 barrels per day and Cairo’s Mostorod with a capacity of 142,000 barrels per day

Mr Dangote has already provided $7 billion in fairness out the $14 billion estimated complete price of the undertaking.

Funding

Some Nigerian banks supplied a syndicated loan of $three.3 billion for the undertaking.

The African Export-Import Financial institution (Afreximbank) has additionally promised to assist the Dangote Group to access overseas funding for the project.

Afreximbank President Okey Oramah gave the assurance during a tour of the undertaking with the financial institution’s board members in 2016.

Dr Oramah said the board members decided to visit the Dangote Group to assess the challenge for potential financial assistance.

He stated the Dangote Group was making tremendous impression throughout the continent, which included in Tanzania, Gambia, Zambia and Niger.

“We are supporting them in what they are doing in those nations, so we’re equally supporting them on this ongoing undertaking, so it is important for the Board of Directors of Afreximbank to pay a courtesy go to to the positioning.

“It will be significant to come and see first-hand the undertaking that is ongoing because we are additionally planning to support them to make sure the project is delivered on scheduled,” stated Dr Oramah.

Another non-public buyers had been still visiting the project site to guage the amenities with the prospect of investing in the venture.

The doubtless benefits of the Dangote Refinery to Nigeria are diverse.

Mr Dangote stated that the mission would save the country about $7.5 billion yearly in foreign trade being used to import petroleum merchandise and likewise generate $5 billion foreign alternate earnings yearly.

Jobs

The plant, according to him, will generate over a hundred,000 employment alternatives and revive over eleven,000 filling stations that had been shut on account of shortage of merchandise.

Dangote stated that the refinery would decrease the price of petrol products in Nigeria and save some prices incurred in importation.

He urged the Federal Government to pursue the diversification programme, to wean Nigeria from heavy reliance on crude oil export.

Based on him, the very best technique to diversify the economic system was through agriculture and “our fertiliser plant is in step with that objective”.

“By the time we finish out fuel pipeline, it could possibly generate about 12,000mw and we can export gas to other African countries.

“We might have the capability to retailer 4 billion litres of products and might load 2,680 trucks per day.”

The Lagos State Governor, Mr Akinwunmi Ambode, stated the venture would create some 235,000 jobs each immediately and indirectly.

He mentioned the challenge would increase the economic system of Lagos and entire Nigeria through its multiplier results.

The Impartial Petroleum Marketers of Nigeria National President, Mr Chinedu Okoronkwo, described the Dangote Refinery as a welcome development.

He said it might ease operations of entrepreneurs and assist to scale back their costs, stressing that the association had lengthy been calling for whole deregulation of the sector. He said that the brand new refinery would additionally increase industrialisation in the nation.

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