Lagos, Nigeria: Dangote Oil Refinery Starts Production

The Dangote refinery, a long-awaited project in Nigeria, is inching closer to fuel production as it receives its first crude feedstock shipment. The OTIS tanker, transported a cargo of Nigeria’s Agbami crude, signalling the initiation of operations after several delays.

The cargo arrived at the Lekki port on December 7. The tanker’s cargo of 950,000 barrels marks the commencement of fuel production at the $19 billion Dangote refinery. This milestone follows years of setbacks due to a lack of domestic crude feedstock, but recent agreements between Nigerian National Petroleum Company (NNPC) and Dangote have unlocked the supply chain.

The refinery, located near Lagos, has been equipped to process various Nigerian crude grades, initially starting with Agbami crude, sourced from Chevron’s deepwater development. Upon full operation, the facility aims to produce significant quantities of gasoline, gasoil, jet fuel, and LPG, with an ultimate goal of meeting Nigeria’s domestic fuel needs and potentially exporting surplus products.

Nigeria’s reliance on gasoline imports due to the poor state of existing refineries has incurred additional costs for the country. With the Dangote refinery’s anticipated output, there’s an optimistic outlook toward achieving energy self-sufficiency. Although the facility is projected to initially produce diesel, aviation fuel, and LPG, plans are underway to scale up production to include petrol.

The removal of fuel subsidies by President Bola Tinubu aimed to redirect the saved funds—over $1.8 billion between June and September—into social development initiatives, despite price increases sparking public concern.

The impending commencement of operations at the Dangote refinery heralds a crucial turning point for Nigeria’s energy independence, promising a significant reduction in fuel import dependence and potentially positioning the country as an exporter of refined petroleum products in the near future.