Dangote to take 400,000 bpd of Nigerian crude
Dangote oil refinery is poised to process up to 400,000 barrels of crude per day (bpd) over the next two months and will reach full capacity in the coming months.
According to a cargo allocation list, the massive plant near Lagos is set to receive approximately 24 million barrels of crude in October and November, signalling a shift towards utilising more domestic supply.
Ronan Hodgson, a London-based analyst at FGE, said that the increased demand from Dangote could significantly tighten the West African crude market in the fourth quarter.
Hodgson noted that this could push Nigeria’s crude exports below one million barrels per day due to the refinery’s substantial intake.
However, some of these shipments may face delays, with October’s schedule including two cargoes initially postponed from September.
Despite this, the volume slated for the coming months is notably higher than the refinery’s average intake of 255,000 barrels per day in the first half of the year, as Dangote gradually scaled up its operations.
The 650,000bpd refinery is currently operating at 60-70 person capacity, with expectations to reach full capacity within months, according to Vartika Shukla, chairman of Engineers India Limited, the project management firm overseeing the facility.
The latest allocations also suggest a reduction in Dangote’s purchases of US crude, traders said.
Earlier in the year, the refinery imported millions of barrels of West Texas Intermediate (WTI) Midland crude but later re-sold some and halted plans for further acquisitions.
In a deal reached last month, Nigerian National Petroleum (NNPC) Limited agreed to supply crude to the refinery in exchange for exclusive rights to distribute the gasoline it produces.
Experts note that if Dangote continues to increase its processing rates, Nigeria may be closer to achieving its long-anticipated goal of reducing expensive imports of refined oil products.
“As the refinery boosts production, the need for gasoline and diesel imports in West Africa will diminish rapidly,” Hodgson said.
