Nigeria's long-awaited Dangote refinery starts diesel, jet fuel output

Nigeria's colossal 650,000 b/d Dangote refinery has begun fuel production, potentially creating a new domestic market for Nigeria's crude oil and helping the OPEC member end gasoline imports, Dangote group announced.

The $19 billion facility will produce diesel and jet fuel at the first instance, before progressing to producing premium motor spirit (gasoline), the Nigerian conglomerate said in a statement on Jan. 12.

"We...thank Nigerians for their belief and support in this project. We have started the production of diesel and aviation fuel, and the products will be in the market within this month once we receive regulatory approvals," Dangote chairman Aliko Dangote, Africa's richest man, said.

"Dangote Petroleum Refinery can meet 100% of Nigeria's requirement of all refined products, gasoline, diesel, kerosene, and aviation jet, and also have surplus of each of these products for export," the company added.

"The refinery has so far received six million barrels of crude oil at its two SPMs located 25 km from the shore. The first crude delivery was done on Dec. 12, 2023, and the sixth cargo was delivered on Jan. 8, 2024," it said.

In September, Dangote executive Devakumar Edwin said the refinery would start producing at 370,000 b/d before eventually ramping up to 650,000 b/d. S&P Global analysts predict the refinery will not hit full operating capacity until mid-2025.

Dangote had said previously that the refinery can load 2,900 trucks a day at its truck-loading gantries. The jet fuel from the refinery will conform to Euro V specifications. The facility was also designed to meet the World Bank, US EPA, European Union emission regulations and Nigeria's regulatory authorities' emission/effluent norms.

The company started test runs on the production units of the refinery last week, after receiving the final cargo of crude oil from state energy firm Nigerian National Petroleum Corp.

Located on the outskirt of Nigeria's commercial capital, Lagos, the project was officially completed in May but had yet to make any oil products due to a lack of domestic crude feedstock.

NNPC, which owns a 20% stake in the refinery, had last December agreed to supply 6 million barrels of crude oil as feedstock to the Dangote refinery.

Repeated delays

First mooted in 2013, the project has faced years of delays and cost overruns.

Nigeria is Africa's top oil producer, but exports almost all its crude due to the lack of local refining capacity. Virtually all the country's state-owned refineries are currently shut down for repairs.

The West African nation has also struggled in recent years to produce crude up to its capacity of 2.5 million b/d, with output averaging 1.57 million b/d in September, according to government data.

Nigeria hopes the coming onstream of the Dangote refinery, as well as the startup of the 60,000 b/d Old Port Harcourt later in February, will help the country end gasoline imports and spark a long-awaited oil sector revival.

Nigeria imports around 1 million mt-1.25 million mt/month of gasoline to meet domestic demand, estimated at around 50 million liters/day to 60 million liters/day.