Nigeria’s state oil firm, NNPC Ltd, is set to supply the new 650,000 barrel-per-day Dangote oil refinery with up to six cargoes of crude oil in December. These shipments will be utilized for test runs, according to three industry sources knowledgeable about the matter.
The Dangote oil refinery, funded by Africa’s richest man, Aliko Dangote, is expected to have a transformative impact on oil trading in the Atlantic Basin. It will reduce the demand for fuels produced in Europe and the United States that have historically powered vehicles, trucks, and generators on the African continent.
Located in the Lekki free trade zone near Lagos, the refinery, once fully operational, is poised to make Nigeria a net exporter of fuels, a long-sought goal for the OPEC member that has been heavily reliant on imports.
One NNPC official stated that six cargoes, amounting to 200,000 barrels per day (bpd), will be supplied in December as part of a one-year deal. Future volumes will be based on mutual agreement and availability.
The other sources indicated that about 4-5 cargoes, totaling at least 130,000 bpd, are planned for supply. A Dangote Group official mentioned that some of the agreements have confidentiality clauses without providing further details.
NNPC holds a 20% stake in the refinery. The commissioning process for the refinery began in May of this year after experiencing significant delays and cost overruns, with the final price tag reaching $19 billion, higher than the initial estimates of $12-14 billion. The commissioning phase involves testing various units to ensure that they produce the intended products, such as gasoline and diesel, and that they respond correctly to control panels.
