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The Dangote Oil Refinery, the largest petrochemical complex in Sub-Saharan Africa, owned by the continent’s richest man Aliko Dangote, is set to import 2 million barrels of West Texas Intermediate (WTI) Midland crude from the United States.
This decision, confirmed by traders familiar with the matter, underscores the refinery’s consideration of costs, logistical feasibility, and processing capabilities. Notably, this marks the first instance of the refinery sourcing non-Nigerian crude, raising questions about the motivations behind this shift.
Trafigura Group, a multinational commodity trading company headquartered in Singapore with major hubs in Geneva and Houston, secured the deal for the end-February delivery of the U.S. crude to the Dangote Oil Refinery.
From exclusive Nigerian focus to global sourcing: Dangote Oil Refinery strategy unveiled
While the exact reasons for importing U.S. crude remain unclear, industry traders speculate that price considerations could be a key factor. WTI Midland barrels are often more competitively priced compared to grades such as Nigeria’s, which are typically benchmarked against the North Sea grade Brent.
The move by the Dangote Oil Refinery signals a significant change in strategy.
Initially, the refinery had pledged to exclusively refine Nigerian oil, emphasizing its commitment to meeting Nigeria’s demand for refined petroleum products. The facility, boasting a world-record capacity of 650,000 barrels per day, aims to cover 100 percent of the country’s needs for petrol, diesel, kerosene, and jet fuel.
Strategic moves in Dangote Oil Refinery’s quest for efficiency
The refinery’s decision to diversify its crude sources comes on the heels of commencing production of diesel and aviation fuel, following the receipt of the sixth batch of crude barrels supplied by the Nigeria National Petroleum Corporation (NNPC).
The Dangote Oil Refinery’s infrastructure, designed in alignment with international standards, includes truck-loading gantries capable of efficiently loading 2,900 trucks daily.
As the refinery continues to scale toward its full capacity, the move to import U.S. crude underscores the dynamic nature of the l energy landscape and the strategic considerations at play in the quest for operational efficiency and cost-effectiveness.
