The Nigerian National Petroleum Company Limited (NNPCL) will supply crude oil to Dangote Refinery in December 2023.
This is according to a November 2 report by Reuters.
In the report, it was stated that NNPCL plans to provide the 650,000 barrels per day Dangote oil refinery, with up to six shipments of crude oil in December for testing, based on information from industry sources both at NNPCL and Dangote refinery.
As reported by Reuters, an NNPC official, preferring anonymity, specified that six shipments, totalling 200,000 barrels per day, are set for December as part of a one-year agreement.
The volumes for the following months will be determined by mutual consent and availability.
The other sources mentioned a plan for 4-5 cargoes, equivalent to at least 130,000 barrels per day. A Dangote Group official, speaking on condition of anonymity, mentioned that certain agreements contain confidentiality clauses, without further details when inquired about the NNPC supply arrangement.
More Insights
Recall that on October 31, Nairametrics reported that the Dangote refinery had missed the diesel and aviation fuel refining deadline previously set by the Dangote Group CEO, Devakumar Edwin during a September 2023 interview with S&P Global Commodity Insights.
The failed deadline was due to a delay in crude oil deliveries. In that report, Nairametrics also quoted one of its sources who said:
- “It is not true that Mr. Edwin Devakumar lied about the dates provided in September. However, there are some delays when it comes to crude deliveries. But the company is working to resolve these challenges and soon the refinery will begin refining activities.”
As the NNPCL will be supplying crude oil to the refinery based on its supply agreement, the refinery will begin activities because it is technically ready to start refining. It is important to note that the NNPCL has a 20% stake in the refinery.
The NNPCL Group Chief Executive Officer, Mele Kyari had previously highlighted that the company’s involvement in equity participation aims to enhance both “national energy security and fiscal security.”
He referred to a government directive requiring the Corporation’s involvement in any privately owned refinery surpassing a capacity of 50,000 barrels per day.
What you should know
The International Energy Agency (IEA) has said that the 650,0000 barrels per day Dangote refinery, will enable oil demand growth in the next decade, especially for African countries that heavily rely on imported refined energy products in the present.
