After starting operations in January, Nigeria’s $20 billion Dangote refinery is expected to have a significant impact on global crude flows when it achieves full capacity, according to trading sources and ship tracking data.
Nigeria is the biggest oil producer in sub-Saharan Africa, producing 1.5 million barrels per day in June, according to S&P Global Commodity Insights’ Platts OPEC Survey.
Refinery could tighten product market
Due to a shortage of refining capacity, all of the nation’s oil was exported up until this year, with gasoline, diesel, and jet fuel imported for domestic consumption.
According to company sources and ship tracking data, the plant scaled to 400,000 b/d in its first six months of operation and supplied diesel, jet fuel, naphtha, and fuel oil to both domestic and export markets.
This means that the mega-refinery could, therefore, tighten the light, sweet crude market.
A West African crude trader told Commodity Insights said,
According to company sources and ship tracking data, the factory scaled to 400,000 b/d in its first six months and supplied diesel, jet fuel, naphtha, and fuel oil to both domestic and export markets.
Through 18 voyages, 30% of the petroleum supplied to Dangote has been of the US quality.
Domestically, Dangote has claimed that in June, IOCs were allegedly charging it $6/b more for crude, which prompted Nigeria’s government to try and compel local supply at the market price and enable currency payments for crude.
Associate Director and Head of Refining at S&P Global Commodity Insights, Rasool Barouni,
Analysts observe that the facility is already having an impact on the light, sweet complex, but they won’t fully evaluate it until it reaches 600,000 b/d and begins manufacturing gasoline.
Samuel Oyekanmi, a research and insight associate with Norrenberger Financial Group said,
Dangote Industries Limited has reiterated that production of Premium Motor Spirit (PMS), commonly known as petrol, will commence at the Dangote refinery in July 2024/August.
Devakumar Edwin, vice president of Oil and Gas at Dangote Industries Limited, stated this during a visit by the S&P Global team to the Dangote Refinery in Ibeju-Lekki, Lagos.
According to Punch reports, Edwin added that the refinery will harness Africa’s abundant crude oil resources to produce refined products locally.
Source: TimesNow.com.ng
