Despite earlier projections, Dangote Refinery has experienced delays in initiating its diesel and jet fuel refining operations. This setback is attributed to the Nigerian National Petroleum Company (NNPC) Limited’s inability to supply the agreed 300,000 barrels of crude oil per day to the refinery. While the refinery is technically prepared for refining activities, the delay in crude oil deliveries has impacted the timeline for production.
Key Points:
- Initial Projections and Current Status:
- Dangote Refinery had initially planned to commence diesel and jet fuel refining by October 2023, followed by petrol refining in November 2023.
- As of October 31, 2023, the refinery has not yet begun refining activities, with sources attributing the delay to a shortage of available crude oil.
- Crude Oil Supply Challenges:
- Sources familiar with the matter indicate that NNPC Limited has not fulfilled the agreement with Dangote Refinery for the daily delivery of 300,000 barrels of crude oil to the facility.
- Anticipated crude imports for the refinery, scheduled for the current month, have also not arrived, leading to further delays.
- Technical Readiness for Refining:
- Despite the delay, Dangote Refinery is technically equipped for refining operations. It can initially focus on diesel and jet fuel refining and subsequently transition to refining Euro 5 standard petrol.
- Alternative Crude Sourcing:
- Devakumar Edwin, Executive Director at Dangote Group, had previously mentioned the possibility of sourcing oil from trading houses until NNPC is able to supply the refinery.
- The refinery aims to exclusively rely on Nigerian crude starting from November 2023.
- Mitigating Risks:
- Concerns about theft and vandalism of pipelines in Nigeria prompted Dangote to utilize its pipelines connecting the refinery to single buoy moorings in its custom-built port. This bypasses the associated risks of pipeline operations in the country.
Conclusion: The delay in commencing diesel and jet fuel refining at Dangote Refinery underscores the challenges associated with securing a consistent supply of crude oil. While the refinery is technically prepared for operations, the need for uninterrupted crude deliveries remains crucial. Dangote’s proactive approach to mitigate risks, such as using alternative transportation methods, highlights the company’s commitment to navigating Nigeria’s complex operating environment. The resolution of these challenges will be pivotal in realizing the refinery’s full production potential.
