Nigeria: Dangote refinery to import US crude amid growing competition
Africa’s largest refinery, the Dangote Petroleum Refinery, is set to import crude oil from the United States in the upcoming months, highlighting the increasing competitiveness of American barrels in the global market, as reported by Bloomberg on Monday – January 29, 2024.
The $20 billion facility, located in the Dangote Industries Free Zone, Ibeju-Lekki, Lagos State, is gearing up to produce refined products, with expectations of receiving two million barrels of crude oil from Trafigura Group in February.
The refinery, a subsidiary of Dangote Industries Limited, boasts a capacity of 650,000 barrels per day, converting crude oil into a range of petroleum products like diesel, gasoline, jet fuel, and kerosene.
Since December 12, 2023, it has received a total of six million barrels of crude oil from the Nigerian National Petroleum Company Limited and other international oil companies operating in Nigeria, with the latest cargo arriving on January 8, 2024.
In a noteworthy move, the facility recently purchased two million barrels of WTI Midland from Trafigura Group for end-February delivery, marking the first instance of the Dangote refinery acquiring non-Nigerian crude.
Trafigura, a multinational commodity trading company, sold the crude, emphasising the global nature of their activities, including participation in the oil and petroleum products market.
This strategic shift to importing US crude aligns with the Dangote refinery’s capability to process various crude oil grades from different countries.
The decision also reflects the transformative impact of the growth in US oil supply over the past decade, extending its influence to regions like Asia and significantly impacting oil-dependent economies like Nigeria.
Notably, previous reports from September 20, 2023, revealed the refinery’s temporary importation of crude oil, with Executive Director Devakumar Edwin mentioning the commitment of crude to other entities, although undisclosed at the time.
The management clarified that this arrangement was temporary, and the refinery would resume receiving supply from the Nigerian National Petroleum Company Limited starting November.
Despite initial projections for production in October and November 2023, the facility has yet to commence the production of refined products up to the present date.
