Nigeria’s Dangote Refinery, the largest in Africa, is poised to commence exporting diesel fuel that meets European standards in June, in addition to selling petrol domestically. This development comes as the refinery increases its production following its official launch in January 2024.
“We expect to have gasoline in the market before the end of next month, and we’ll also have Euro V diesel for export, which has less than 10ppm sulfur content,” stated Devakumar Edwin, Vice President for Oil and Gas at Dangote, during a recent industry event.
The refinery began exporting naphtha in March, low-sulfur straight-run fuel oil (LSSR) in May, and started selling diesel and jet fuel domestically in April. Naphtha exports, a key component in blending finished-grade gasoline, continue from the refinery, with 80,000 tons scheduled to load on May 31, according to Kpler.
Edwin mentioned a potential reduction in spot sales, noting: “We had a meeting to see, probably, how we can slow down our sales because we’ve already made quite a few forward bookings.” He added, “Export, for example, aviation/jet, the last vessel went to the Caribbean islands. The next vessel, we are booking for the US market.”
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This marks a significant advancement for Nigeria’s petroleum sector. The Dangote Refinery, with a capacity of 650,000 barrels per day, has the potential to meet domestic fuel demands and become a regional exporter. Since commencing operations in January 2024, the refinery has been ramping up production.
It started with crude distillation and received approval for a mild hydrocracker and desulfurization units in March. The forthcoming export of Euro V diesel, with its low sulfur content, positions the refinery to compete directly in the European market, potentially boosting the company’s revenue and contributing positively to Nigeria’s foreign exchange earnings.
Additionally, the refinery plans to list on the Nigerian Exchange Group (NGX) by the end of 2024, providing further funding opportunities and allowing Nigerians to invest in this transformative project. Aliko Dangote, chairman of Dangote Group, expressed his desire for Nigerians, Africans, and other investors to become shareholders in the refinery, emphasizing the historic nature of the venture.
“The listing, most likely, I won’t be surprised if we list on the Nigerian Stock Exchange by the end of this year. We will do that. It is new and I think we would like to allow Nigerians, Africans, and other investors to join in making this historic move,” he stated.
Dangote noted that the refinery would reach a capacity of 500,000 barrels per day by the end of July and its full capacity of 650,000 barrels towards the end of the year. He clarified that the US oil being imported does not overshadow Nigerian oil, explaining that 24 million barrels from the US equate to two cargoes per month, representing 10 percent of the refinery’s demand at full capacity.
“As you know, we are ramping up and I think by July or thereabouts, we will be talking about over 500,000 barrels per day refining capacity, which is huge. And then, by sometime towards the end of the year, we believe that we will hit our capacity of 650,000 barrels per day.
So, it is a very huge capacity. The US oil is not something that will come and take over Nigerian oil. It is roughly about two cargoes in a month, which is about 10 percent of our demand at full capacity,” Dangote explained.
