Mohammed Momoh
Abuja, May 22, 2023
The first privately owned 650,000 barrels per day refinery and petrochemical plant since 1956 when Nigeria started commercialising oil and gas, has been commissioned in Lekki Free Zone of Lagos.
The inauguration of the Dangote Petroleum Refinery and Petrochemicals, a significant mile stone in the oil and gas industry was attended by five African Presidents of Senegal, Ghana, Togo, Chad, Nigeria.
The occasion on Monday, May 22, 2023 had been long awaited as the last hope of Nigerians who have suffered untold hardship in accessing and using petroleum products in a country which is world sixth highest producer of oil.
The journey leading to the realisation of today’s dream started in 2013 when Africa’s richest businessman, Aliko Dangote, conceived the project estimated to cost $9 billion.
Ups and downs, innovations and expansion drove the cost of the project to a staggering $18.5 billion and with uncertainty enveloping the completion date..
The President of Dangote Group, Mr Aliko Dangote, had on May 29, 2022, assured that production would start before the end of 2022 and that the facility would help Nigeria to tackle the lingering issue of petroleum products’ importation and scarcity as well as expose Nigeria’s midstream and downstream sectors to the international markets.
Dangote, at the 2022 Nigerian Content Midstream and Downstream Oil and Gas Summit in Lagos, described the refinery as an investment that would transform the economies of countries in sub-Saharan Africa.
“It makes me feel terrible to see a country as big and resourceful as Nigeria with high population, importing all its petroleum products, so, we decided it is time to tackle this challenge.
“It is not government’s responsibility alone to address the challenge of petroleum products’ importation in Nigeria. No, we have to collaborate with the government to tackle the issue of petroleum importation.’’
Dangote emphasised the need for the country to shift attention from crude oil export and diversify the economy.
“We should not as a country, be comfortable with generating revenue from crude oil export alone, because tomorrow, people may not need crude oil.
“If we do not move from crude oil to something else, we will have issues as a country. This is one of the things that I took upon myself to help address,” he said.
The refinery will be able to supply all the gasoline, diesel and aviation fuel used in the West African country and a third of its output will still be available for export, Dangote said.
Also, Mr Devakumar Edwin, the Group Executive Director of Dangote Industires, confirmed the $18.5 billion cost of the firm when completed and that the petrochemical project houses the world’s biggest ammonia plant, which had started producing fertiliser.
He said the state-owned Nigeria National Petroleum Company (NNPC), a facilitator of exploration and exploitation of oil and gas, has acquired 20 percent stake in the refinery that is worth $2.7 billion.
The Managing Director of NNPC, Mr Mele Kyari, in July 2022 confirmed that the corporation had paid an initial amount of $1 billion for the ordinary shares it acquired in the refinery
Kyari said the investment in the refinery will guarantee energy security for Nigeria.
With Dangote Refinery in place, coupled with planned completion of the rehabilitation of the moribund Port Harcourt, Warri and Kaduna refineries by the end of 2023, Nigeria would become a hub of petroleum products in Africa.
He explained that the rehabilitation of the state-owned refineries in Kaduna, Warri and Port Harcourt was ongoing, saying: “We have been trying to fix our refineries. We have awarded the contracts.’’
“We as a national oil company, has the responsibility to ensure energy security for this country and the meaning of this is that you must secure the supply sources.
“That means that with the NNPC’s refineries in place and Dangote Refineries operating along with other initiatives that we are making, we are going to have a massive hub of petroleum production in West Africa.
“This will change the flow of product supply in the whole globe and scarcity will be history in Nigeria,” he assured.
Restive Nigerians cannot wait to see production kick off in the Dangote plant which they believe would halt the suffering of the nation, especially motorists, households and the aviation sector as well as the ease it will bring to available foreign exchange.
Aviation minister Hadi Sirika on August 2, 2022 assured Nigerians that the Dangote refinery and other state owned refineries under rehabilitation will help end the scarcity of petrol and aviation fuel.
“By the grace of God, perhaps once the Dangote refinery is on line or if the government fixes its refinery — which is now ongoing — we will begin to refine this product and sell it.”
Minister of State for Petroleum, Mr Timipre Sylva, also confirmed the Turnaround Maintenance (TAM) of the state refineries to ensure local refining of petroleum products, in addition to the acquisition of stakes in the Dangote refinery.
A statement by Mr Horatius Egua, Senior Adviser, Media & Communications, to the Minister on August 3, 2022, said: “Nigerians have grappled with fuel scarcity for long. Let me once again appeal to Nigerians to be patient with government in finding lasting solutions to the crisis.
“Let us as Nigerians stand shoulder to shoulder in our shared quest for a greater country.”
A human rights activist, Mr Adeleye Osunde, sees the new order in the petroleum industry as a relief but warned that the local production should not translate to additional burden to consumers.
“The locally produced petroleum products should be within the reach of every Nigerians. The sale of crude to these refineries should not be denominated in dollars, because the crude oil is taken from Nigerian soil and Nigerians should reap the benefits,’’ he said.
Mr Yusuf Ahmed, a commercial motorist, doubts if the scarcity of petrol will be over even with the coming to stream of Dangote refinery and other refineries.
“I fear that Nigeria will come up with other excuses to deny is citizens of the comfort of their God given natural resources.’’
Aside the problem of importation and shortage of foreign exchange needed to pay for import, he said that the activities of unions and operators in the petroleum chain should be checked.
Many of the unions, especially transporters of petroleum products, are a big pain in the process, and explained: “They go on strike at will and I hope that now that petrol sector has been deregulated and in private hands, these extraneous factors will be checked.’’
The petroleum distribution chain should be simplified and short, Mr Aliyu Ahmed, a logistic officer of the National Association of Petroleum Product Marketers, advised.
“If this is not streamlined and made short, I fear that the supply bottlenecks and scarcity will persist,’’ he warned.
However, Information and Culture minister Lai Mohammed had also described the refinery as a game changer in Nigeria’s energy challenge once it comes on stream.
The minister who led a team of journalists on inspection tour of the refinery said the facility will engender huge value addition that would contribute to the increase in Gross Domestic Product (GDP)
“It will conserve foreign exchange by putting an end to importation of petroleum products and huge sum paid for subsidy and in addition, create employment and generate foreign exchange through export of finished products.’’
There is no doubt that this venture will create more employment opportunities for Nigeria’s teeming population.
It has been herculean as many Nigerians and motorists have in many instance gone through harrowing experience of scarcity of petroleum products.
Thy virtually slept at fuel stations as persistent scarcity occurs in country that is world’s sixth largest oil producer.
Motorists, especially commercial drivers, spend the larger parts of their days in long and unending queues in few filling stations where petrol is dispensed while some rich people patronise black markets that have taken over roadsides in major cities.
Motorists who patronise black marketers pay at least 150 percent more than the pump price of N195 ($0.45 cent) per litre but unsure of the quality of the liquid served them by these roadside sellers.
Some motorists have reported their vehicles developing faults after using the adulterated petrol bought from these black market operators who have taken over the business from petrol stations.
Scarcity and high cost of aviation or jet fuel have spark increase in flight fares as well as truncating smooth aviation operations.
Many households have abandoned the use of kerosene for cooking and were back to wood fuel which environmentalists have condemned as a threat to ecosystem and depletion of forest resources.
Dr Ahmed Rilwan, an environmentalist, said: “When we think we are moving forward, we are actually moving backward. Trees felling has increased again and it is not good enough.’’
“Trees felling to produce wood fuel is a danger to the environment. I believe that with the Dangote refinery, kerosene will be back in homes.’’
The Nigerian National Petroleum Corporation (NNPC), yesterday, assured Nigerians that the importation of petroleum products into the country would soon be over.
Group Managing Director (GMD) of NNPC, Mallam Mele Kyari, said at the recently concluded public hearing on the Medium Term Expenditure Framework (MTEF) organised by the House Committee on Finance in Abuja.
He said once the Dangote refinery was is completed, the importation of petroleum products into the country would be over.
“Once completed, the refinery will not be under any obligation to buy crude oil from Nigeria but any other country of its choice. So, it is important we invest there, so as to have stakes and a ready market for our crude oil,” he said
According to Kyari, the direct sale of crude oil to the refinery will reduce export and importation costs and generate employment for many people in the country.
The Chief Executive Officer of Major Oil Marketers Association of Nigeria (MOMAN), says the refinery will contribute significantly to the growth of the economy through its own production and also from ancillary industries.
Mr Clement Isong, expressed confidence in the refinery on Sunday in Lagos and expressed optimism that the facility will help reduce the cost of petrol, if the government deregulates the commodity.
” All Nigerians look forward to the future with hope and conviction that this refinery will contribute significantly to the growth of the economy through its own production and also from ancillary industries.
“The fertiliser plant will impact our agriculture, providing indirect opportunities for the West African sub-region.
“The high-quality petroleum products, which meet Afri 6 standards, are excellent for health and environmental protection,” he said.
Isong said that “more importantly, the size and location of the refinery will help manage price volatility, which is probably more important than the price itself.
” It will also help in optimising logistics costs.
“l have no doubts that such a massive undertaking would have properly planned for efficiency in product evacuation and optimisation.
“Competition, free markets, and private sector participation lead on its own to market efficiencies. Other refineries in the country will have to compete, and this is good for the consumer as well as the economy.
“Compete in price, compete in product quality, compete in customer service delivery,” Isong added.
Data in a document obtained from the company showed that the Dangote Refinery could support the establishment of 26,716 fillings stations, create 100,000 direct and indirect jobs, and provide a $21bn market for Nigerian crude oil annually.
The Dangote Petroleum Refinery and Petrochemical Project, a subsidiary of Dangote Group will produce Euro-V quality gasoline and diesel, as well as jet fuel and polypropylene.
The facility was “designed to process a large variety of crudes including many of the African crudes, some of the Middle Eastern crudes and the US (United States) Light Tight Oil.
On the target market and petroleum sufficiency, it stated that the refinery could meet 100 per cent of the Nigerian requirement of all liquid products, including gasoline (petrol), diesel, kerosene and aviation jet, and would also have a surplus of each of these products for export.
The Dangote Group has released 19 facts about the Dangote Petroleum Refinery and Petrochemicals refinery that everyone should know.
In a bullet format released on May 22, 2023, Dangote Group state as follows:
1. It is located in Ibeju, Lagos, Covering a land area of approximately 2,635 hectares.
2. World’s Largest Single-Train 650,000 barrels per day Petroleum Refinery with 900 KTPA Polypropylene Plant.
3. The Refinery is powered by a 435 MW Power Plant.
4. At full capacity, it can meet 100% of the Nigerian requirement of all refined products and also have surplus for export.
5. Designed for 100% Nigerian Crude with flexibility to process other crudes.
6. Self-sufficient marine facility with ability for freight optimisation. Largest single order of 5 SPMs anywhere in the world.
7. Diesel & gasoline from the refinery will conform to Euro V specifications.
8. The refinery design complies with World Bank, US EPA, European emission norms and Department of Petroleum Resources (DPR) emission/effluent norms.
9. It incorporates state-of-the-art technology.
10. It is designed to process large variety of crudes including many of the African Crudes, some of the Middle Eastern Crudes and the US Light Tight Oil.
11. About 65 million cubic metres of sand dredged, costing approximately €300 million, using the world’s largest dredgers.
12. Over 1,200 units of various equipment were bought to enhance the local capacity for site works.
13. Dangote Group bought 332 cranes to build up equipment installation capacity.
14. Also built is the world’s largest granite quarry to supply coarse aggregate, stone column material, stone base, stone dust & material for break water (10 million tonnes per year production capacity).
15. In a bid to bring over dimensional cargoes close to the site directly, Dangote Group had to developed a port and constructed two quays with a load bearing capacity of 25 tonnes/sq metre.
16. Constructed two more quays in the port with a capacity to handle up to Panamax vessels to export, two quays to handle liquid cargoes.
17. The port will have 6 quays, including a roll-on/roll-off quay.
18. In the course of the civil works, 700 piles were drilled on some days, with total number of piles up to 250,000.
19. It has 177 tanks of 4.742 billion litres capacity
