Buhari, five other African Presidents commission N19bn Dangote refinery in Lekki

Buhari, five other African Presidents commission N19bn Dangote refinery in Lekki 1

President Muhammadu Buhari and five other African Presidents commissioned the 650,000 barrel-per-day Dangote refinery in the Lekki free zone near Lagos on Monday, 22nd May.

The refinery’s pipeline system is touted to be the world’s largest single-train refinery, with 1,100 km of pipe handling 3 billion standard cubic feet of gas every day, and upon operation, will be the seventh largest refinery in the world, beating ExxonMobil Singapore refinery.

The commissioning of the refinery comes amid high hopes in the Nigerian energy sector, as the Nigerian government wants to phase off petrol subsidies in the second half of the year.

Subsidy payments have consistently increased from N351 billion in 2005 to N4.39 trillion in 2022, with N3. 6 trillion set aside to support fuel subsidies for the first six months of 2023.

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The administration is banking heavily on the completion of the pipeline to eliminate petroleum imports.

In his welcome speech, Dangote said: “Beyond today’s ceremony, our first goal is to ramp up production of the various products to ensure that within this year, we’re able to fully satisfy our nation’s demand for higher quality products.”

He claimed that he felt driven to reduce the nation’s reliance on petroleum imports as well as the poisonous and inferior goods that were frequently produced in the country.

In addition, he said, “We intend to make sure that our plants are operated at the highest level of capacity utilization and efficiency to enable us to export competitively to other markets, especially in the ECOWAS and wider regions, where 53 out of 55 countries rely on imports to meet their demand for petroleum products.”

In 2021, the federal government authorised NNPC Limited to purchase a 20% ownership in Dangote Refinery for $2.76 billion, signifying a dramatic shift in government policy.

Aliko Dangote, Africa’s richest man, built the huge complex, which is one of Nigeria’s single largest investments. It has a 435-megawatt power station, a deep seaport, and a fertiliser unit.

ALSO READ: How Dangote Refinery will improve Nigeria’s oil production

The refinery is expected to meet 100% of Nigeria’s refined product requirements while also having a surplus of each of these products for export. It is intended to treat Nigerian crude but can also process other crudes.

The refinery will generate petrol and diesel of Euro-V standard, as well as jet fuel and polypropylene. The Dangote refinery’s management claims that the design complies with the World Bank, US EPA, European emission standards, and the Department of Petroleum Resources (DPR) emission/effluent standards.

The refinery is also expected to generate a market for Nigerian oil worth $1 billion per year, in addition to $9.9 billion in foreign exchange revenues.

After years of delays, the refinery cost $19 billion, up from earlier predictions of $12 billion to $14 billion.

Aliko Dangote, President of Dangote Group, stated in an interview with a special edition of London-based The Economist Magazine that the start-up of the refinery may save Nigeria up to $10 billion in foreign money and earn another $10 billion in exports.

“The refinery’s completion will not only create direct and indirect jobs but will also lead to skills transfer and technology acquisition opportunities that will benefit the downstream sector.

“Moreover, the refinery’s production of critical products like naphtha and polypropylene will stimulate the development of other industries, such as cosmetics, plastics, and textiles.

“Refineries on this scale could save Nigeria up to $10 billion in foreign exchange and generate approximately $10 billion from exports,’’ Mr Dangote said

According to industry analysts, the refinery should alleviate the shortage of petroleum products in Nigeria, as well as continuously create jobs, foster the development of local workforce capabilities, and support the expansion of the local economy. 900 engineers are now being trained by the company in refinery operations abroad.

Togo’s President, Gnassingbé Eyadéma, Senegalese President Macky Sall, Niger Republic President Mohamed Bazoum, and Chadian President Mahamat Déby are among those who attended the ceremony on Monday, 22nd May.

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