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$12bn Dangote Refinery: FG Assures Total Support On Products Feedstock, Offtaker

  • Comments Huge Investment By Nigerians

The Federal Government of Nigeria (FGN) has reiterated its resolve to deepen its support for the Dangote Refinery and Petrochemical to succeed through products feedstock and offtaker that will add value to the nation's economy.

Timipre Sylva, the Minister of State, Petroleum Resources disclosed this during the tour of the massive refinery project in Lagos on Sunday.

Dangote refinery is situated at Lekki Free Trade Zone in Ibeju Lekki in Lagos.

The Minister was accompanied by Mele Kyari, the Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Shakur Rufai, acting Director, Department of Petroleum Resources and all heads of NNPC subsidiaries.

Sylva said the Dangote Refinery and Petrochemical was a testament that the country possesses enabling environment for businesses to thrive.

He noted that the government will support Dangote in areas of feedstock and offtakers in terms of gas and crude oil, adding that it's subject to their discussion with Dangote on areas of support.

"This is one of the most impressive projects i have ever seen in Nigeria done by Nigerians. It is a very encouraging development.

"For us as a government, we have resolved to support this project.

Sylva added that the success of the project so far would boost investors confidence in the country's oil and gas project.

He also implored Nigerians to support the Dangote refinery project with a view to ensuring that it creates more value addition to the nation's economy.

According to him, "It behoves on every Nigerian to support this gigantic projects, which is the pride of our country.

‘‘For an individual to embark on such magnitude of project, it will be a wrong thing if the government and people of Nigeria not to give him maximum  support.

"You have demonstrated patriotism in investing wisely in the sector, l urged others to follow suit to invest in Nigeria.

“We will still continue to churn out policies that will help stimulate growth in the sector," he said.

The minister further argued that the government will ensure that the 12-billion dollars Dangote refinery  is adequately supported to fast track its completion.

Mele Kyari, the Group Managing Director (GMD) said: "We are not competing with Dangote but complementing each other to boost production capacity.

"Our objective is the same, to make Nigeria a net exporter of crude. 

"We are working seriously to ensure our Refineries work,  so that by the time Dangote comes on stream, it will complement each other to make Nigeria net exporter of gasoline and other associated products.

"In the next five years, Dangote will add 650,000 barrels, government with 445,000 barrels  with others companies coming up to boost capacity," he said.

In his remarks, Alhaji Aliko Dangote, President, Dangote Group,  said: "We believed in Nigeria and if we don't do it ourselves, nobody will come down to do it for us.

"There is three per cent growth population increase annually in Nigeria, so, apart from that Nigeria are supposed to meet the needs of West, East and Central Africa in terms of supply."

Similarly, Devakumar Edwin, the company's Group Executive Director, Strategy, Capital Projects and Portfolio Development, explained that the capacity of the refinery is comparable to 22 percent of existing refineries in Nigeria.

Edwin suggested that the asset creates market for 11billion per annum of Nigerian crude and can meet 100 percent of the Nigerian requirement of all liquid products.

He said that Nigeria is Africa’s largest crude oil producer, but lacks refining capacity to meet its own fuel needs.

“The Dangote refinery, which is designed to maximise petrol output, will produce enough to allow for a small surplus of that fuel for export.

"It will also be able to send a large volume of diesel and jet fuel to international markets.

“We are confident that we can meet 100 per cent of the requirement of the country; so, the balance will go for export," he added.

Edwin disclosed that Dangote plans to take advantage of local crude supply, adding that it won’t participate in the crude-for-fuel swap deal that is managed by the Nigerian National Petroleum Corporation (NNPC).

“We are going to buy the crude just at the export price and will sell our products at the import price, the crude swap is operating only for the importers of the product.

"The new refinery has been designed to process varieties of crude from sweet to light crude sourced both locally, and abroad.

"Dangote plans to export its diesel to Europe and gasoline to Latin America, Western and Central African markets," Edwin posited.

He said that evacuation of refined products will be done by sea and through roads.

“We are thinking of investing in vessels. We want to make sure we are not held for ransom by any transport operators.

"Africa’s largest oil refinery had revealed that it would deliver its fuels to Nigerian consumers via roads and sea ports, and will effectively replace all of Nigeria’s fuel imports once fully operational.

"Congested ports and dilapidated roads led some to expect that the company would build a pipeline or other method of getting its fuel to consumers.

"Fuel would go via “shuttle” boats to Nigerian cities Warri and Calabar, and that other deliveries would go in trucks," he added.

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