In a groundbreaking development, Nigeria’s state oil company, NNPC Ltd, is set to provide the newly established Dangote oil refinery with six shipments of crude oil this December, according to three industry insiders in the know.
Financed by Aliko Dangote, Africa’s wealthiest individual, the refinery, located in the Lekki free trade zone near Lagos, is poised to revolutionize the oil trade in the Atlantic Basin. This move threatens to disrupt a profitable market for fuels originating from Europe and the United States, which have long supplied the automobiles, trucks, and generators across the continent.
Once fully operational, this refinery will transform Nigeria, an oil-producing powerhouse, into a net exporter of fuels, marking a significant milestone for the OPEC member, which currently heavily relies on fuel imports.
An unnamed NNPC official, one of our sources, disclosed that a total of six cargoes, amounting to 200,000 barrels per day (bpd), will be provided in December as part of a year-long agreement. Future shipment volumes will be determined through mutual agreement and availability.
Other sources suggest a plan for four to five cargoes, which translates to at least 130,000 bpd. A representative from the Dangote Group, who wished to remain anonymous, cited the presence of confidentiality clauses when questioned about the NNPC supply arrangement.
It’s worth noting that NNPC holds a 20% stake in the refinery, which commenced its commissioning process in May of this year. The refinery had faced significant delays, ultimately incurring a cost of $19 billion, surpassing initial estimates of $12-14 billion. The commissioning process involves testing various units responsible for producing products ranging from gasoline to diesel, ensuring they respond effectively to control panels.
