Business

Dangote Refinery To Buy 24m Barrels Of US Crude Oil

The Dangote Oil Refinery in Lagos aims to purchase millions of barrels of US crude in the upcoming year to boost processing rates. A document obtained by Bloomberg reveals that the Dangote plant, spearheaded by Africa’s wealthiest individual, Aliko Dangote, has issued a term tender for the acquisition of 2 million barrels per month of West Texas Intermediate Midland crude for a duration of 12 months starting from July.

This initiative, originating from Africa’s largest oil producer, underscores the refinery’s significant role in global crude and fuel trading, positioning it as the continent’s largest fuel-producing facility upon full operation. The tender deadline is set for 3 p.m. on May 21.

Notably, the tender highlights the challenges faced by Nigerian crudes in competing with American supply, as noted by a trader specializing in West African barrels. Requests for comments from Dangote officials were not immediately answered.

The refinery, a colossal project boasting a capacity of 650,000 barrels per day (BPD), is currently under construction in the Lekki Free Zone near Lagos, Nigeria. Upon completion, it is poised to become Africa’s largest oil refinery and the world’s largest single-train facility.

In March, the Nigerian government expressed concern over potential supply shortages for refineries, including Port Harcourt, Kaduna, Warri, Dangote, and BUA, emphasizing the need for adequate local crude oil supplies to sustain petroleum production once these facilities are fully operational. Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, highlighted the importance of increasing production in the sector to support domestic refineries, including both established and modular facilities.

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