Refinery of Africa’s richest billionaire Aliko Dangote to buy 24 million barrels of U.S. crude
Africa’s largest oil refinery, the Dangote Oil Refinery owned by Africa’s wealthiest billionaire Aliko Dangote, has issued a tender to purchase 24 million barrels of U.S. crude oil over the next year.
The $20.5-billion refinery is seeking a steady stream of 2 million barrels per month of West Texas Intermediate (WTI) Midland crude starting in July. This significant move underscores the refinery’s potential to disrupt the global crude and fuel markets.
Analysts view the tender as a sign of U.S. crude’s competitiveness against Nigerian supplies. “The tender highlights the challenges facing Nigerian crude oil as it competes with competitively priced American supplies,” said a West African crude trader. The tender closes on May 21.
Nigeria’s Dangote Oil Refinery turns to U.S. oil
The decision aligns with the refinery’s initial strategy of utilizing U.S. oil for up to one-third of its feedstock during its ramp-up phase, demonstrating its agility in adapting to market dynamics.
Despite being a major oil producer, Nigeria struggles to meet its OPEC quota and domestic refining needs. Consequently, the Dangote Oil Refinery has sourced a significant portion of its initial oil, specifically WTI Midland, from the U.S. to bolster production.
The Dangote Petrochemical Complex, located on the outskirts of Lagos, represents a significant leap in Nigerian industrial development. Beyond its refining capabilities, the complex houses a polypropylene plant producing 1 million metric tonnes annually and two of the largest fertilizer trains with a combined annual capacity of 3 million tonnes of urea.
Dangote Oil Refinery: Disrupting market, lowering diesel prices
The Dangote Oil Refinery prioritizes environmental sustainability. It recycles all its process water, generates 50MW of power from waste heat, and produces cleaner Euro-V standard fuels. Additionally, the refinery utilizes advanced carbon capture technologies to reduce CO2 emissions and mitigate the environmental impact of transporting crude oil by sea.
Boasting the world’s largest single-train capacity (650,000 barrels per day), the Dangote Oil Refinery aims to wean Nigeria off its reliance on imported fuels. The refinery has already begun supplying petroleum products to the local market, marking a major step towards Nigerian energy independence.
The refinery’s operations have also impacted fuel prices. Dangote’s entry into the market led to a decrease in diesel prices from N1,200 ($1.052) per liter to N1,000 ($0.877) per liter. Analysts expect this trend to continue as foreign oil remains more cost-effective.