Dangote Refinery Set to Import 12 Million Barrels of US Crude

 





The Dangote Petroleum Refinery is preparing to receive up to 12 million barrels of crude oil from the United States, as reported by the Africa Report on Monday.


Due to local supply issues, the refinery has turned to importing crude oil to support its operations, as it strives to achieve full refining capacity at the newly constructed $20 billion facility.


The refinery aims to reach a production capacity of 650,000 barrels per day by June of this year. However, the Nigerian National Petroleum Company Limited is currently facing challenges in providing sufficient local crude supply to facilitate this increase in daily output.


According to the report, the shipment of 12 million barrels has already departed the United States and is expected to arrive in Nigeria next month. An insider disclosed, "Approximately 12 million barrels of crude have left the US and should reach Nigeria by February."


The PUNCH has indicated that the Dangote Petroleum Refinery is increasing its crude oil imports as the supply from the NNPC falls short of the requirements for fuel production at the $20 billion facility located in Lekki.


Officials at the refinery have stated that production has been elevated to around 500,000 barrels per day, with the goal of achieving the 650,000 barrels per day target by June.


While confirming that the naira-for-crude arrangement remains in effect as per President Bola Tinubu's directive last year, sources have indicated that additional crude imports will be necessary to meet production goals.


Reports suggest that the NNPC is struggling to provide the refinery with the 350,000 barrels per day needed from the total 450,000 barrels allocated for Nigeria's domestic consumption.


Given its current production level of 500,000 barrels per day, officials have acknowledged the necessity of sourcing crude oil from outside Nigeria to secure adequate feedstock.


An official remarked, "At present, we are operating at 500,000 barrels per day, with plans to increase to 650,000 by midyear. This necessitates sourcing crude oil from wherever it is available.”

“Currently, our production stands at 500,000 barrels per day (bpd), with plans to increase to 650,000 bpd by mid-year. This indicates a standard procedure for sourcing crude oil from available markets,” as stated by an official at the plant in an interview with The PUNCH.


It is important to note that in July, President Tinubu instructed the Nigerian National Petroleum Corporation (NNPC) to facilitate the sale of crude oil to local refineries in naira.


In October, the committee overseeing the naira-for-crude initiative began selling crude exclusively to the Dangote refinery in naira, specifying that sales would be limited to refineries producing petrol.


However, with the Port Harcourt and Warri refineries set to resume operations, additional refineries will be eligible for the naira-for-crude arrangement.


According to the crude oil production forecast provided by oil-producing companies and the refining needs of operational refineries in Nigeria, as signed by Gbenga Komolafe, the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, the Dangote refinery will require 550,000 barrels of a blend of Nigerian crude oil daily, totaling 17.05 million barrels monthly, and 99.55 million barrels from January to June 2025.


The Dangote refinery is in the process of constructing eight additional tanks to accommodate imported crude, as it plans to stockpile this oil due to the unreliability of local supplies.


Refinery officials have indicated that the limited crude supply from the NNPC is increasing reliance on imports.


The addition of eight tanks will enhance the refinery's crude storage capacity by 41.67 percent, bringing it to 3.4 billion liters.


Devakumar Edwin, the Vice President responsible for the oil and gas sector at Dangote Industries, recently said that relying on imported crude rather than local purchases necessitates maintaining higher crude stockpiles.


In May 2024, the refinery reportedly issued a term tender for the acquisition of two million barrels of West Texas Intermediate Midland crude each month for a duration of 12 months, commencing in July of the previous year, which totals 24 million barrels over the year.

The Dangote refinery presently provides petrol, diesel, and aviation fuel to Nigeria as well as to other nations.

Credit: PUNCH

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