Foreign oil giants seek supply agreements with Dangote Refinery

Posted by News Express | 30 May 2021 | 591 times

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•Aliko Dangote

 

 

Dangote Group, a Nigerian industrial conglomerate founded by Africa’s wealthiest person, Alhaji Aliko Dangote, has disclosed that oil giants from the Middle East and western countries have sought to seal crude oil supply agreements with its refinery.

The conglomerate, also, confirmed a report by THISDAY on Friday that the Nigerian National Petroleum Corporation (NNPC) had sought to acquire a 20% stake in the upcoming refinery.

Group Executive Director, Strategy, Capital Projects & Portfolio Development, Dangote Industries Limited, Mr. Devakumar Edwin made this disclosure in an interview with Reuters.

As shown in the Reuters report, Edwin disclosed that at least four oil firms, including the country’s state-oil company had approached it to partially acquire the asset.

Edwin disclosed that the oil firms from Western and Middle East countries and involved in trading and crude production were looking to secure crude supply agreements, a similar objective to that pursued by the NNPC.

The report listed Vitol, a Dutch energy and commodity trading company and Trafigura, a Singaporean multinational commodity trading company among firms seeking crude supply agreements with the refinery.

Edwin was quoted as saying that the oil firms “are seeking to have a 20% minority stake in Dangote Refinery as part of collaboration … so that they can sell their crude.”

He said Dangote refinery “is not looking for equity and the company wants to be able to secure crude from the market. Nigeria, Africa’s biggest crude oil exporter, imports virtually all of its fuel due to moribund state refineries, which has prompted the state oil company’s interest in the 650,000 barrel per day (bpd) Dangote refinery.

“Nigeria lost its biggest customer, the United States, after it started producing shale oil. The US is now pushing into some of Nigeria’s most valued markets,” Edwin said.
According to him, the refinery is scheduled for mechanical completion this year with commissioning by January 2022.

THISDAY had reported that NNPC had announced its willingness to purchase a 20 percent minority stake in Dangote refinery.

The refinery, expected to process a variety of light and medium grades of crude, including petrol and diesel as well as jet fuel and polypropylene, is owned by Nigeria’s Dangote Group and is worth an estimated investment of $15 billion.

It is designed to produce up to 50 million litres of petrol and 15 million litres of diesel a day, roughly 10.4 million tonnes of the product, 4.6 million tonnes of diesel, and 4 million tonnes of jet fuel per year, in addition to having a fertiliser plant, which will utilise the refinery by-products as raw materials.

Speaking during a two-day Nigeria Oil and Gas Opportunity Fair (NOGOF), 2021, tagged: “Leveraging Opportunities and Synergies for Post Pandemic Recovery of the Nigerian Oil and Gas Industry”, the corporation’s Chief Operating Officer, Refining and Petrochemicals, Mr Mustapha Yakubu, said discussions were already ongoing to that effect.

The top NNPC official stated during the virtual event, that the collaboration would further ensure undisrupted product supply to Nigerians when the deal materialises, noting that one of its divisions, the Greenfield Refining Projects Division (GRPD) was handling the issues relating to completing the agreement.

“We have what we call the green field refinery, and the Greenfield Refining Projects Division (GRPD) of the NNPC. What we do, our strategy is to collaborate and seek strategic partnerships with private investors.

“At the moment , we have Dangote refinery which has 650,000 capacity barrels per day plus a mini 80,000 tons per annum petrochemical plant.

“What are we doing there? I can tell you today that we are seeking to have a 20 per cent minority stake in Dangote refinery as part of our collaboration and you know that there’s a huge quantity of crude for that refinery.

“That’s 650,000 barrels, going into a single crude distillation unit (CDU). When that comes on board, it will also wet the nation for us,” he stated. (THISDAY)


Source: News Express

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