The Nigerian National Petroleum Corporation (NNPC) has announced plans to supply the Dangote Oil Refinery with 300,000 barrels per day of crude oil when production fully commences.
The refinery will have a capacity of 650,000 barrels per day.
NNPC Managing Director Mele Kyari made the announcement on Aug. 25, following a July announcement to commit $2.7 billion to acquire a 20-percent stake in the refinery.
“We will have a right to 20 percent of production from the facility,” he said. “We structured our equity participation on the basis that the refinery must buy at least 300,000 barrels per day of crude oil of our production.”
Platts reported the managing director as saying that the move will bolster domestic fuel supply and guarantee outlets for its crude. “This guarantees our market at a period when every country is struggling to find markets for their crude oil,” Kyari said.
The Dangote Oil Refinery is a 650,000-barrel-per-day integrated project under construction at Lagos’s Lekki Free Trade Zone.
The refinery will be Africa’s largest and the world’s most extensive single-train facility, privately owned by Africa’s wealthiest man, Aliko Dangote.
Its crude distillation unit is designed to process 12 crudes simultaneously and to process three Nigerian crude grades, including Escravos, Bonny Light and Forcados. Therefore, the plant is expected to produce 327,000 barrels per day of gasoline, 244,000 barrels per day of gas oil and diesel, 56,000 barrels per day of jet fuel and kerosene and 290,000 metric tonnes per year of propane and LPG.
Initially scheduled to commence operations in 2022, the company recently moved its commencement date to 2025.
A news report recently stated that delays in commencement could further increase the Dangote Group’s indebtedness to lenders to an estimated $8.4 billion by 2025. Aside from its current debt burden, the refinery services debt of nearly $700 million per annum.
