Dangote Refinery begins operations with six cargoes crude oil

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The Dangote Oil Refinery and Petrochemicals is commencing main operations with up to six cargoes of crude oil to be supplied by the Nigerian National Petroleum Company Limited, NNPCL in December.

The supply will facilitate the refinery’s test runs, stated three industry sources.

The refinery, funded by Aliko Dangote, will transform oil trading in the Atlantic Basin and remove a lucrative outlet for fuels produced in Europe and the United States that have for years powered the cars, trucks and generators on the continent.

The refinery, with 650,000 barrel-per-day, is in the Lekki free trade zone near Lagos.

Indeed, once the refinery is fully up and running, it will turn oil powerhouse Nigeria into a net exporter of fuels, a long-sought goal for Nigeria that is currently almost totally reliant on imports.

An NNPCL official, who declined to be named, indicated that cargoes, or 200,000 barrels of oil a day, bpd, would be supplied in December as part of a one-year deal, adding that volumes in future months would be supplied “based on mutual agreement and availability”, reports Reuters.

The other sources said about 4-5 cargoes, or at least 130,000 bpd, were planned. A Dangote Group official, who did not wish to be named, said “some of the agreements have confidentiality clauses” without elaborating when asked about the NNPC supply deal.

NNPC has a 20 per cent stake in the refinery.

The refinery began the commissioning process in May this year after running years behind schedule at a cost of $19 billion, above initial estimates of $12-14 billion.

Commissioning includes testing the different units that make products from gasoline to diesel and making sure they respond to the control panels.