Dangote Buys One Million Barrels of Crude from Algeria in Ramp Up Capacity

By Adedapo Adesanya

The Dangote Petroleum Refinery has bought one million barrels of crude oil from Algeria, a member of the Organisation of the Petroleum Exporting Countries (OPEC).

According to a new report from Augus Media, the refinery bought the crude cargo from Glencore trading firm in February, and is due at the 650,000 barrels capacity refinery between March 15 and March 20.

The move comes as the refinery, valued at $20 billion, is chasing 100 per cent refining capacity, with drawbacks from crude loadings affecting its ability to produce fuels at optimal capacity.

The Lagos-based oil facility received about 24 million barrels of Nigerian supply in October and November last year.

Last month, Mr Edwin Devakumar, vice-president of Dangote Industries Limited (DIL), said the refinery could begin operating at full capacity in 30 days.

The major shareholder in the structure and chairman, Mr Aliko Dangote assured Nigerians that his refinery has over N600 billion worth of premium motor spirit (PMS) in storage that can sufficiently meet Nigeria’s needs.

Augus Media also said none of the tankers which have loaded in Algeria in February have flagged Africa as their destination, suggesting the cargo will load in March.

According to the report, a trader noted that the Saharan blend’s quality is suitable for the Dangote refinery and that it is competitively priced compared to Nigerian grades.

“Nearly 420,000 b/d of crude was delivered to Lekki for Dangote so far this year, with about 82pc of that made up of light sweet grades, Vortexa data show. Nigerian crude accounted for 87pc of all arrivals,” the Augus Media report said.

“The March-loading trade cycle for Saharan Blend was slow to kick off due to sluggish demand in Europe because of seasonal refinery maintenance and ample light crude supply.

“This may have encouraged buyers in Europe to hold off on purchases of Saharan Blend in anticipation of weaker price differentials, prompting sellers to look to alternative outlets.”

The report added that Saharan blend prices have dropped by $1 per barrel in February when March-loading cargoes were trading, and now stand at a 20 cents per barrel discount to the north.