Dangote Refinery Won’t Rely On Nigerian Crude Oil
By Adedapo Adesanya
The Dangote Group Executive, Mr Devakumar Edwin, has said that the Dangote Refinery will not rely solely on Nigerian crude for its operations.
This was one of the points made by the official as he gave a detailed production timeline that shed light on crude and product flows as well as delays on the 10-year project to S&P Global Commodity Insights.
The company had announced that it would begin producing up to 370,000 barrels per day of diesel and jet fuel in October and gradually reach 650,000 barrels per day by November.
The $19.5 billion refinery, which was officially inaugurated by former President Muhammadu Buhari two weeks before the end of his administration in May, will increase its production in phases, beginning with 350,000 – 370,000 barrels per day of diesel and jet fuel by October, when the crude distillation unit, sulfur block and hydrogen plant should be online.
However, the plant will not rely on Nigerian crude from the Nigerian National Petroleum Company (NNPC) Limited as it will consider other sources, including the US and Saudi Arabia.
He said it was not advisable for the plant to be solely dependent on Nigerian crude, meaning the refinery can process most African crudes as well as Middle Eastern Arab Light and even US light-tight oil.
He also didn’t rule out the possibility of Russian crude, which has been embargoed by Western countries and its allies following the country’s aggression in Ukraine.
“We can take even some of the Russian grades… if the global system opens up to allow us to receive [them],” he said.
According to Mr Edwin, currently, the NNPC cannot supply the refinery due to a prior commitment until November, so it is buying oil from trading houses, which could include Vitol and Trafigura.
In his words, “At the last minute [NNPC] said, ‘We have actually committed our crude on a forward basis to someone else’, so immediately they don’t have the crude,” he said.
However, he also said that the refinery should run exclusively on Nigerian crude by November, adding that NNPC will supply some crude at knockdown prices due to its equity stake as the state oil company has a 20 per cent stake in the refinery.
He also said the Nigerian oil will be purchased in US Dollars and not in Naira because the refinery is located in a free zone on the outskirts of Lagos.