The Dangote Refinery, inaugurated on May 22, 2023, in Lekki, Nigeria, is a monumental project owned by Africa's richest man, Aliko Dangote.
This refinery, when fully operational, is expected to process about 650,000 barrels of crude oil per day, making it the largest single-train refinery in the world. The Nigerian government, through NNPC, holds a 7.2% stake in this $20 billion venture.
Since its inception, the refinery has been sourcing crude oil from various regions, including domestic sources within Nigeria and imports from the United States and Brazil. Recently, Aliko Dangote announced plans to expand crude sourcing to other African oil-producing nations to ramp up capacity.
The refinery's product exports have seen massive activity, with naphtha cargoes moving both east and westwards. From March to June, seven cargoes were exported to Europe, mainly Antwerp, and five to Northeast Asia, predominantly Daesan, South Korea.
Diesel and gasoil exports have largely remained within Africa, accounting for 55% of the cargo volume, with minimal exports to Spain and Puerto Rico. Jet fuel (Jet-A1) initially stayed within West Africa but later moved to Brazil and Northwest Europe.
The top importers of products from the Dangote Refinery include the USA, Spain, France, South Korea, Singapore, Angola, Togo, Guinea, Belgium, and Israel. This diverse range of importers highlights the global reach and impact of the refinery's operations.
Despite the refinery's promising start, it faces challenges, including clashes with local regulators and oil majors. Additionally, the Atlantic Basin's clean product market is experiencing weakened refinery margins due to an oversupplied market and sluggish demand. The ramp-up of the Dangote Refinery is expected to further intensify competition among refiners in the region.
Pamela Munger, Lead Market Analyst at Vortexa, noted that "the ramp-up of the Nigerian plant will impact European gasoline exports most, but also diesel, and LPG exports – the latter especially from US refiners."
As the refinery continues to increase its production, it is anticipated to produce 325kbd of gasoline, 150kbd of diesel, and 55kbd of jet/kero, with most of the gasoline retained for domestic markets and the majority of diesel and jet fuel likely to be exported.
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