Africa’s largest refinery, the Dangote Petroleum Refinery, has initiated tenders to sell two fuel cargoes for export.
Trading sources, privy to the matter, informed Reuters that these are the inaugural exports from the recently commissioned refinery.
The refinery boasting a nameplate capacity of 650,000 barrels per day, was constructed on a peninsula near Lagos, the commercial hub, by Aliko Dangote, the wealthiest individual on the continent.
Dangote has contracted Trafigura for the first shipment, totalling 65,000 metric tons of low-sulphur straight-run fuel oil, scheduled for loading at the end of February, three sources informed Reuters.
According to three more sources, the second tender encompasses approximately 60,000 tons of naphtha. Two of them specified that the tender is slated to conclude on February 15th, while details regarding loading arrangements remain pending.
Nairemetrics reported that indications are pointing to regulatory approvals causing a delay in Dangote Petrochemical Refinery’s plan to introduce aviation fuel (Jet A1) and diesel for sale in the Nigerian market in January.
Nairemetrics also learnt that Trafigura Group has sold 2 million barrels of WTI Midland to the Dangote refinery for delivery by the end of February. This marks the first time the refinery buying non-Nigerian crude.
According to reports, the refinery was preparing to deliver its first fuel cargo to the domestic market within weeks.
Meanwhile, industry experts have stated that the two fuels available are typical products obtained by processing light sweet crude through a crude distillation unit (CDU) in a refinery, without additional upgrading capacity.
They have suggested that bringing the upgrading units online could take several months.
What you should know
- For years, Nigeria has depended on costly imports to fulfil nearly all its fuel needs. However, with the $20 billion refinery, the country is poised to transform into a net exporter of fuel to neighbouring West African nations. This represents a significant potential change in the power and profit dynamics within the industry.
- Meanwhile, since its inauguration in May last year by former President Muhammadu Buhari, Nigerians have been eagerly anticipating the release of products from the Dangote refinery.
- The new 650,000 barrel-a-day oil refinery commenced operations earlier this month. Initially targeting a processing rate of 350,000 barrels per day, the refinery aims to gradually escalate production towards its full capacity.
- While the refinery primarily sources domestic crude through a supply agreement with the trading arm of the state-owned NNPCL, it recently received its first shipment of Nigeria’s Agbami crude, facilitated by a trading unit of Shell. Subsequent deliveries included Nigeria’s Amenam, Bonny Light, and CJ Blend streams.
- In addition, Trafigura Group sold 2 million barrels of WTI Midland to the refinery for delivery by the end of February. This marks the first time the refinery buying non-Nigerian crude.