Aliko Dangote, President of the Dangote Group, has announced groundbreaking plans to expand the Dangote oil refinery from its current 650,000 barrels per day capacity to a staggering 1.4 million barrels per day, which would make it the largest refinery in the world. The ambitious expansion, revealed in an interview with S&P Global, involves seeking Middle Eastern funding and represents a dramatic escalation of the project’s original scope.
The announcement comes as the refinery has already transformed Nigeria into a net exporter of diesel and jet fuel while supplying vast quantities of petrol once imported from Europe. In July, Dangote first revealed plans to scale up to 700,000 barrels per day by December this year, but the new target significantly surpasses those earlier projections and would eclipse the current world’s largest refinery, the 1.36 million barrels per day facility in Jamnagar, India.
“We have to build the refinery again, either here or somewhere else. But really, somewhere else is not possible because we’d have to go and spend so much building infrastructure, and we have the infrastructure already here,” Dangote explained, describing his ambitions to develop African energy independence as a “herculean task.”
Engineers working at the Lekki complex have confirmed that the facility was designed with room for growth, pointing to empty concrete plots capable of holding a second refining system. The expansion could involve building a second refinery with the same configuration, potentially with the addition of a vacuum distillation unit to boost light ends yields.
Beyond the refinery expansion, Dangote revealed that the company is also working on potential linear alkylbenzene and base oil projects and aims to grow its annual polypropylene capacity from one million metric tonnes to 1.5 million metric tonnes in the next few years.
To fund the expansion and develop a new petrochemicals project in China, Dangote is actively considering a strategic partnership with Middle Eastern companies. “Our business concept is going to change. Now instead of being 100 per cent Dangote-owned, we’ll have other partners,” he said. Within the next year, he noted that the refining business will list 5 to 10 per cent of its shares on the Nigerian stock exchange, with plans to retain no more than 65 to 70 per cent ownership.
The plant’s main petrol engine, the residue fluid catalytic cracker (RFCC), recently went offline in September shortly after a three-week turnaround in August. Devakumar Edwin, Vice President responsible for overseeing refinery operations, confirmed that the RFCC restarted around October 7 and should soon be back at full capacity. A month-long turnaround will be planned to avoid clashing with seasonal demand peaks towards year-end.
While the International Energy Agency projects the world will have 11.4 million barrels per day more refining capacity than needed by 2030, concentrated mostly in China and India, Dangote rejects a model that leaves Africa dependent on imported fuel. He warned that the continent will be in trouble without huge private investment, noting that most African governments lack the capacity to build refineries.
The company’s maturing debt was recently seen as a key funding hurdle before it secured a critical $4 billion financing agreement in August. The door remains open for the Nigerian National Petroleum Company Limited to boost its stake after it trimmed its interest to 7.2 per cent, though Dangote wants to first demonstrate the refinery’s full capabilities.
Source: punchng.com