Dangote refinery projects 650,000bpd June, plans crude import

•Facility now producing 500,000bpd as officials look beyond Nigeria to meet demand for product

The Dangote Petroleum Refinery is planning to import more crude oil as supply from the Nigerian National Petroleum Company Limited becomes insufficient for fuel production at the $20bn Lekki-based facility.

Officials at the plant said the facility has ramped up production to about 500,000 barrels per day, with the target of hitting the 650,000bpd mark by June this year.

While affirming that the naira-for-crude deal is still on as directed by President Bola Tinubu last year, the sources, who spoke in confidence due to lack of authorisation to speak to the press, maintained that the facility will have to import more crude to meet its target.

For the 650,000-capacity refinery, the NNPC is reportedly struggling to supply 350,000bpd from the 450,000bpd crude meant for Nigeria’s local consumption.

With its current production capacity of 500,000bpd, officials said there is a need to look beyond the shores of Nigeria for the feedstock.

According to them, the claim is not that the NNPC cannot supply crude, but that the feedstock needed by the refinery daily cannot be solely supplied by the state-owned oil company.

Asked if the refinery plans to import more crude now that the NNPC refineries are coming back on stream, one of the impeccable sources at the plant replied, “Of course!

“This is a 650,000 barrels per day capacity refinery. And as you know, we are also ramping up. You see, maybe by the middle of the year, we will hit 650,000. Do you know what 650,000bpd means?“

Another source corroborated this, saying, “It is not that anybody is saying NNPC cannot do it. No! But you look at what we have. We are not a 200,000bpd refinery. We are talking about 650,000 barrels.

“Currently, we are at 500,000bpd; we will ramp to 650,000 by midyear. You know what it means? So, it is a normal process to source crude oil anywhere it is available.”

In another chat with our correspondent, a consultant to the refinery boasted that the refinery game is for the ’big boys’, saying the refinery is one of the largest in the world.

“It is not that anybody is saying NNPC cannot do it. The game is up, and the game is for the ’big boys’.

“How many 650,000-capacity refineries do you have in this world? Even in the entire Europe? Have you seen the OPEC report? They said the refinery is affecting their PMS market in Europe. Of course, the eagle has landed,” he stated.

On the burn rate of Dangote petrol, the consultant explained, “The whole thing is simple. You know we are producing the Euro 5 standard. So, the quality is bound to be high. That’s what Nigerians are experiencing in the burn rate of our petrol.”

Naira-for-crude deal

As Nigeria’s refining capacity increases, the 450,000 barrels of crude oil allocated for local refineries is no longer enough.

This is as the Nigerian Upstream Petroleum Regulatory Commission revealed that the Dangote refinery, the Port Harcourt refinery, and six others would need 770,500 barrels for daily fuel production.

From data the NUPRC sourced from the Nigerian Midstream and Downstream Petroleum Regulatory Authority, the country’s refining capacity is put at 974,500 barrels per day, taking a look at only functioning refineries.

Recall that in July, President Bola Tinubu ordered the NNPC to sell crude oil to local refineries in naira.

“The Federal Executive Council has approved that the 450,000 barrels meant for domestic consumption be offered in Naira to Nigerian refineries, using the Dangote refinery as a pilot. The exchange rate will be fixed for the duration of this transaction,” Tinubu’s spokesman, Bayo Onanuga announced last year.

In October, the committee supervising the naira-for-crude deal commenced the sale of crude to only the Dangote refinery in naira, saying it would sell to only petrol-producing refineries.

However, with the Port Harcourt and Warri refineries coming on stream, more refineries would be considered for the naira-for-crude arrangement.

The NUPRC said 123.5 million barrels of crude would be needed by eight refineries in the first six months of 2025.

The refineries are: Dangote refinery, Port Harcourt refinery, Warri refinery, Kaduna refinery, Opac refinery, Waltersmith refinery, Duport Midstream Company Limited, Aradel refinery and Edo refinery.

According to the crude oil production forecast of producing oil companies and the refining requirement of functional refineries in Nigeria signed by the NUPRC Chief Executive, Gbenga Komolafe, the Dangote refinery is forecasted to need 550,000 barrels of a blend of Nigerian crude oil daily, 17.05 million barrels monthly, and 99.55 million barrels between January and June 2025.

Opac refinery requires 5,000bpd; Waltersmith needs 4,500bpd; Duport needs 2,000bpd while Edo refinery requires 1,000bpd.

Others are: Aradel refinery, 7,000bpd; Port Harcourt refinery, 60,000bpd; Warri refinery, 75,000bpd, and Kaduna refinery, 66,000bpd.

The PUNCH learned that the first phase of the naira crude sale would be for six months.

In April, the Federal Government would review the programme to ascertain its success or otherwise.

Already, the Dangote refinery is already building eight more tanks to store imported crude.

The $20bn refinery is planning to stockpile imported crude oil as local supplies become unreliable.

Officials of the refinery were quoted as saying that low crude supply from the Nigerian National Petroleum Company Limited “is driving import dependence.”

The building of eight additional tanks will see crude storage capacity at the $20bn refinery jump by 41.67 per cent to 3.4 billion litres.

“Importing crude from other countries instead of buying locally means that our crude stockpiles will have to be higher,” the Vice President in charge of oil and gas business at Dangote Industries, Devakumar Edwin, was quoted as having said.

“So we have started building eight additional crude tanks to hold a billion litres, over and above our original storage capacity. Four of them are nearing completion,” Edwin added, saying crude supply from the NNPC is “still very low”.

With the implementation of the naira-for-crude initiative, the NNPC is expected to supply about 385,000 bpd of crude oil to the Dangote refinery to be paid for in naira. However, it could not be immediately confirmed if this has been the case.

Experts have argued that as Nigeria ramps up crude production, local refineries may have to resort to importation.