The long awaited $18.5 billion Africa’s biggest refinery, Dangote Petroleum Refinery and Petrochemicals, located in Ibeju Lekki free zone in Nigeria’s bustling commercial centre, Lagos, came on stream on Monday about eight years after its construction started.
President Muhammadu Buhari, along four African Presidents commissioned the plant which is arguably the world’s biggest simple-train facility with 650,000 barrel per day capacity constructed in a land area of approximately 2,635 hectares, which is larger than the entire Victoria Island.
The foreign leaders at the ceremony are Presidents of Togo, Gnassingbé Eyadéma; Ghana’s Nana Akufo-Addo; President of Senegal, Macky Sall; President of Niger Republic, Mohamed Bazoum; President of Chad, Mahamat Déby.
President Buhari described the completion of the project as a significant milestone for Nigeria’s economy and a game changer for the downstream petroleum products market in the entire African region.
‘‘This mega industry we are commissioning today is a clear example of what can be achieved when entrepreneurs are encouraged and supported and when an enabling environment is created for investments and for businesses to thrive.
‘‘I am confident that my successor, His Excellency Asiwaju Bola Ahmed Tinubu, will sustain the improvement in our economic and business environment and strengthen the framework of our public private partnership policies to accelerate the pace of our economic growth and development.
‘‘I am happy to leave our economy in very competent hands,’’ he said.
The President who commended Alhaji Aliko Dangote’s leadership in executing the 650,000 barrels per day refinery urged other entrepreneurs to emulate his example in driving economic growth and realizing Nigeria’s economic potential.
He stressed the need for African countries to come together, integrate their economies, eliminate trade barriers, and rally their populations to achieve Agenda 2063 for the continent’s prosperity.
‘‘I urge and encourage our other great entrepreneurs to emulate this iconic Nigerian industrialist and join the Government in accelerating our growth in order to realize our country’s globally recognized economic potential.
‘‘When I travel around Africa and meet and engage my brother Heads of State (and I am delighted some of their Excellences are here) I often sense a quiet expectation that our country is blessed with resources and human capacity to lead Africa’s rise to economic prosperity and the attainment of Agenda 2063 – ‘The Africa we all want.’
‘‘But to achieve the goals of Agenda 2063, Africa must come together – we must integrate our economies, eliminate barriers to trade and energize our youthful population to scale up our productive capacity.
‘‘We must create necessary conditions for our private sector to grow and partner with the public sector to accelerate economic growth across the continent.
‘‘We must not allow outside powers to use some of our leaders to destabilize our economic and political trajectory,’’ he said.
Buhari acknowledged the visionary investments made by the Dangote Group, under the leadership of Dangote, in transforming Nigeria’s economy through its involvement in critical industries such as cement and fertilizer.
He noted that investment in these sectors have played a crucial role in shifting Nigeria from heavy import dependence to becoming a net exporter.
Buhari acknowledged that Nigeria’s economy has faced significant challenges over the years, including deficits in economic infrastructure, insurgency, and external crises such as the Global Financial Crisis, oil price collapses, the COVID-19 pandemic, and the Russia-Ukraine war.
‘‘The consequence of these challenges constitute a severe strain on our economy, limiting government’s ability to provide basic infrastructure without resorting to huge borrowings.
‘‘Our Government, therefore, took the decision to focus attention on creating an enabling environment for the private sector to thrive and fill the enormous gap in investments not only in infrastructure but also in all critical sectors.
‘‘We recognize that without the active participation of the private sector and a strong commitment to public private partnership, our economy would continue to remain severely challenged and our economic growth impeded.
‘‘Government therefore, will and should continue to provide an enabling environment and encourage innovative public private partnerships in all sectors of our economy,’’ he said.
The President emphasized the administration’s commitment to this approach, citing Executive Order 007 of 2019 which facilitated the rehabilitation/construction of many roads by private sector investors using a Tax-credit scheme.
‘‘It is my hope that the succeeding Administration will continue to apply such innovative schemes in partnership with the private sector to accelerate the provision of critical infrastructure in particular roads, power and gas pipelines,’’ he said.
Excited Dangote emphasised the refinery’s role in fulfilling the group’s corporate vision of promoting self-sufficiency and global competitiveness.
”We have built a Refinery with a capacity to process 650,000 barrels per day (plus 900,000 tonnes of polypropylene) in a single train – which is the largest in the world. We have selected the best plants and equipment and the latest technologies from across the world.
”Our products slate is designed to meet the highest quality standards and high-value products including Premium Motor Spirit (PMS), Automotive Gas Oil (Diesel), Aviation Turbine Kerosine (ATK); all of Euro V Standards that will enable us not only meet our Country’s demand but also to become a key player in the African and global market.
”Our coastal location and offshore loading and offloading (SPM) facilities with a capacity to receive all our crude oil supplies and evacuate up to 75% of our liquid products give us direct access to the rest of Africa and the global market for exports. In addition, 80 percent of our production can be discharged through trucks nationwide.”
He disclosed that the huge investment of over $18.5 billion in this industry was prompted by the company’s desire to support and contribute its quota to the Federal Government’s sustained effort to transform the economy and reposition Nigeria as the leading nation in Africa, and a respected member among emerging economies in the world.
According to him, apart from ensuring a consistent supply of high-quality fuels for the transportation sector, the refinery will provide essential raw materials to a wide range of manufacturing sectors, including plastics, pharmaceuticals, food and beverages, packaging, construction, and more.
He further stated that the refinery’s operation and related businesses would generate a substantial number of job opportunities, while the downstream supply and distribution of its products would significantly contribute to the absorption of labor, potentially benefiting hundreds of thousands of individuals.
”Once our plant is fully on stream, we expect that at least 40% of the capacity will be available for export and this will result in significant Foreign Exchange inflows into the country.
“Overall, we are committed to operating our Plant in line with international best practice requirements, recognizing the importance of protecting the environment, and putting in place stringent environmental, health and safety policies to ensure that the Refinery operates in a safe and sustainable manner,” he said.
African’s richest man, Dangote, reported that the first product of the Dangote Petroleum Refinery and Petrochemicals “will be in the market before the end of July, beginning of August this year”.
The President of Dangote Industries Limited stated : “Beyond today’s ceremony, our first goal is to ramp up production of the various products to ensure that within this year, we’re able to fully satisfy our nation’s demand for higher quality products,” he said.
According to him, the accomplishment is to enable Nigeria to eliminate what he described as the tragedy of import dependency and stop — “once and for all” — toxic, substandard petroleum products from being dumped in Nigeria’s market.
“Beyond this, we intend to ensure that our plants are run at the highest capacity of utilisation and the highest efficiency to enable us to export competitively to other markets, especially in the ECOWAS and wider regions in which 53 countries out of 55 are dependent on imports to meet their petroleum products demand,” he added.
He said the project was the realisation of a “clear opportunity” for Nigeria, citing the African Union’s commitment to the creation of an African common market through the African Continental Free Trade Area (AfCFTA).
The facility is expected to produce Premium Motor Spirit (petrol), diesel (Automotive Gas Oil), aviation jet fuel and Dual-Purpose Kerosene (DPK), among other refined products.
President of Dangote Group, Aliko Dangote, on Monday said President Muhammadu Buhari stopped him from quitting the establishment of Dangote Refinery and Petrochemicals, the world’s largest single-train refinery.
Dangote who disclosed during the commissioning of the project in Lagos, said Buhari’s sustained support and encouragement over the past eight years have been a source of great motivation and strength.
He said the desire to go into the petroleum sector began two decades ago but there were setbacks but expressed delight that the project had finally come into fruition.
“The journey to this event was long and arduous. It could not have been possible without the support and collaboration of many parties and individuals.
He reported that President Muhammadu Buhari sustained, supported and encouraged him in the past eight years and was a source of great motivation and strength.
“At times when I felt like giving up, your confidence and quiet words of assurance have made the difference. Mr President, I thank you from the bottom of my heart.”
Dangote also thanked the Lagos State government, starting from the era of President-elect Bola Tinubu, who governed Lagos between 1999 and 2007, till incumbent Governor Babajide Sanwo-Olu.
“Those like me, who have made Lagos our home will testify that since the beginning of the current democratic dispensation, the government of Lagos State has been exceptionally remarkable in its commitment and support for the private sector.”
“From the tenure of the President Elect, H.E Asiwaju Bola Ahmed Tinubu who established the Lekki Free Zone, to the incumbent governor H.E Babajide Sanwolu who has been most proactive in ensuring the successful execution of this project, the State government has indeed demonstrated great commitment to promoting an investment friendly climate, which made it possible for Our Group to invest over $30billion in various industries in the state economy over that period.
“I would like to express our deep appreciation and gratitude to the Lagos State government and its successive governors for the resolute facilitation of this enabling business environment.”
Nigeria could save up to $10 billion in foreign exchange and generate another $10 billion in exports with the commencement of the refinery.
The governor of the Central Bank of Nigeria, Mr Godwin Emefiele, who spoke at the ceremony disclosed that the President of Dangote Group, Aliko Dangote, has started repaying some of the loans used in financing the Dangote Refinery and Petrochemicals.
Emefiele noted that the refinery which was initially estimated to cost about $9 billion when it was conceived in 2013, was completed with a total of $18.5bn with funding distributed into 50 percent equity investment and 50 percent debt finance.
Emefiele, who noted that the commercial loan component of the project was financed majorly by domestic banks with the balance sourced from foreign banks, added that the CBN provided about N125 billion to cover domestic currency requirements for the venture.
“What you may not be fully aware of is that the Dangote Group has started repaying some of the commercial loans even before the commissioning of this facility.
“This reflects the commercial capability of the Group and its Chairman. I am pleased to inform everyone today that, following extensive repayments, outstanding debt has dropped appreciably from over $9 billion to less than $3 billion.”
“I must at this juncture appreciate all the participating local Nigerian banks, who did not only partner with the project through effective financing but were keenly aware of the importance of the project for our nation.
They provided immense support and exceptional understanding, even when interest payments and principal repayment had fallen due,” he said
The Dangote refinery with the capacity to process 650,000 barrels of crude oil per day, is the largest single-train refinery in the world.
Given this processing capacity, the refinery is more than able to meet all of Nigeria’s domestic fuel consumption, which is about 450,000 barrels per day; whilst the excess production will be available for export.
The government and many stakeholders believe that the removal of oil subsidy is ripe because the mega Dangote Refinery which construction started in 2015 would cut drastically the long aged importation of refined petroleum products which Nigeria had been subsidising to reduce market price and burden on citizens.
Aside satisfying domestic use, the refinery would also supply petroleum products to other African countries.
Nigeria which started exploring and exploiting crude oil since 1951, remains largely an import of petroleum products even as it exports an average of two million barrels crude oil daily.
The four state-owned petroleum refineries in Warri, Port Harcourt and Kaduna had be moribund for decades, making the Africa’s most populous country dependent on import which had been consuming larger chunk of Nigeria’s foreign exchange earnings from crude export.
Nigeria and Nigerians and some African countries have eyes on Dangote Refinery which cost of construction has hit $19 billion from the initial $9 billion since 2015 when its construction started.
Aside the astronomical increase in cost of construction due to additional facilities, the refinery has also witnessed an increase in staff strength by 17,000 bringing the total number to 57,000 in the first quarter of 2022.
The Dangote petroleum refinery complex owned by 64-year-old Dangote, with capacity of 650,000 barrel capacity and will process a variety of light and medium grades of crude to produce Euro-V quality clean fuels including gasoline and diesel as well as jet fuel and polypropylene.
It will produce about 50 million litres of petrol daily; and yearly production of 10.4 million tonnes of gasoline, 4.6 million tonnes of diesel, and 4 million tons of jet fuel a year.
It will also produce 0.69 million tonnes of polypropylene, 0.24 million tonnes of propane, 32,000 tonnes of Sulphur, and 0.5 million tonnes of carbon black feed.
