Dangote Refinery: Preparations, Expectations and Inauguration

Dangote Refinery; Preparations, Expectations, and Inauguration (News Central TV)

Aliko Dangote, a Nigerian businessman, unveiled the preliminary designs of the Dangote refinery in September 2013, when he declared that he had secured financing for the project worth about $3.3 billion.

The Dangote refinery was projected to cost $9 billion at the time, of which the Dangote Group would invest $3 billion and secure commercial loans for the remaining $6 billion.

The refinery’s location was changed to Lekki but construction did not start until 2016 with infrastructure setup and excavation, and the anticipated completion date was pushed back to late 2018.

When The Refinery Started

Dangote Refinery; Preparations, Expectations, and Inauguration (News Central TV)

Major structural work began in July 2017, and the Dangote refinery was expected to be mechanically complete by late 2019 and ready for commissioning by early 2020.  

Reports show that partial refining capability was not anticipated to be attained until 2022, citing people familiar with the project as saying that development was likely to take at least twice as long as Dangote had said. 

A urea fertilizer factory, a related project at the location of the Dangote refinery, was planned to start production in late 2018 and generate roughly three million metric tons of urea annually. 

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Cost of The Dangote Refinery

Dangote Refinery; Preparations, Expectations, and Inauguration (News Central TV)

The project’s estimated total cost in 2018 was $15 billion, of which $10 billion would be spent on the refinery, $2.5 billion on the factory that makes fertilizer, and $2.5 billion on pipeline infrastructure.

Dangote needed to borrow 187 billion naira (about $442 million USD) at 12.75% or 13.5% per annum to finish the refinery in July 2022.   

If operations do not start in 2023, investor confidence may suffer, according to Fitch Ratings, which noted that the opening date of the Dangote refinery has been delayed three times in the past four years. 

All four of the NNPC’s refineries—located in Kaduna, Port Harcourt, and Warri—are currently inactive and will resume processing crude oil following a “revamp” in 2023. 

It was announced that the refinery’s power plant would be finished in January 2023.

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The Refinery’s Facility and Complexity

Dangote Refinery; Preparations, Expectations, and Inauguration (News Central TV)

The Dangote refinery is situated on a 6,180 acres (2,500 hectares) site at the Lekki Free Trade Zone, Lekki, Lagos State. It is supplied with crude oil by the largest sub-sea pipeline infrastructure in the world (1,100 km long). When fully operational, it will provide 135,000 permanent jobs in the region.

With a Nelson complexity index of 10.5, the Dangote Oil Refinery will be more complicated than the majority of refineries in the United States (average 9.5) or Europe (average 6.5).

The Jamnagar Refinery in India, the largest refinery in the world, has a complexity of 21.1. The Nelson complexity index essentially rises with the volume and number of post-distillation chemical processes, such as hydrocracking, NHT, CCR, RFCC, polymerization, etc.

Inauguration of Dangote Refinery 

Preparations, Expectations, and Inauguration (News Central TV)

The 650,000 barrels per day oil processing facility will start operating as soon as President Muhammadu Buhari commissions it on Monday, May 22nd. The refinery has been built to handle crude oil grades from the three continents of Africa, Asia, and America.

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Also, it was learned that the refinery will supply Nigeria with an excess of around 38 million litres of gasoline, diesel, kerosene, and aviation fuel each day, fully satisfying the nation’s need for fuel.

The Dangote Refinery could support the establishment of 26,716 filling stations, generate 100,000 direct and indirect jobs, and provide a $21 billion market for Nigerian crude oil annually, according to data in a document that was received from the firm on Sunday.

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