DANGOTE REFINERY WILL HAVE HUGE IMPACT ON NIGERIA’S ECONOMY

-DEVAKUMAR

Dangote refinery has been the delight of Nigeria’s oil industry owing to the country’s ailing four refineries that have undergone several Turn Around Maintenance through successive governments and have failed to work optimally.

Thus, Dangote refinery project is viewed by industry operators as the saviour that will prevent importation of Premium Motor Spirit (PMS) and also meet consumption demand of Nigeria’s teeming population especially small scale industries that use PMS for self-generated power.

 At the Oil Trading Logistics (OTL) Africa Downstream Week which was organized in Lagos. Edwin Devakumar, Executive Director, Dangote Industries Limited, in a panel session said, the demand of petroleum products in Nigeria is extremely high which is enhanced by demand of neighbouring West African countries that are nearby.

According to Devakumar, imports into Nigeria means consumption in the country surpassed other landlocked countries within the region. Gasoline is approximately 55 million litres per day while diesel is 13 million litres per day and total demand of all products within Nigeria and West African countries are approximately 137 million litres per day or 860 000 barrels per day. This is sufficient to support 1.2 million barrels per day refinery.

The Executive Director revealed that Dangote refinery at 650 000 barrels per day has to be supported by the country. In Nigeria and West Africa, there is a huge demand of products and local availability of crude with demand of infrastructure. There is need for many refineries within the West African Coast.

He said every supplier has to compete with imports and any refinery within the region must compete against import from West Europe or Middle East. Therefore, African countries require large scale refineries with maximum standard.

When the Dangote refinery commenced, Devakumar disclosed that the objectives set by its management is for it to meet Europe specification. Nigeria as a country does not follow European specifications. However, management decided that there is need to have a viable refinery with Europe specification enhanced by state-of-the-art technology to transcend West Africa, Middle East and America. The refinery will maximize the highest quality of gasoline with propane plants for petrochemicals.

Taking a look at the product specification in Nigeria, for gasoline, is about 150 ppm the refinery will produce 10 ppm Sulphur gasoline and other derivatives to compete with European countries.

Devakumar made it known that majority of the products will be supplied within Nigeria and West African countries. The refinery will produce approximately 18000 to 40000 per anum of proline propane since there will soon be demand for the product.

The refinery will process different crudes within the region at the best available prices. It will run effective supply optimization and integration will start from the crude market to distribution.

In terms of facilities for evacuation of product and receiving of crude, about two thousand and six hundred trucks per day will evacuate almost 75% of products through road with marine facilities. Due to issues of traffic in Nigeria, evacuation of products will not only be used by trucks and ship, the company is evaluating plans to put badges in the lagoon to evacuate products so as to minimize traffic.

The Executive Director expressed optimism that Dangote refinery will have huge impact on Nigeria’s economy by improving the country’s GDP to almost $5.2 billion a year. The trade balance will improve with almost $10 billion a year while crude export will be reduced since significant amount will be used in the refinery. This will lead to substitution of importation that will save the country about $24 billion with huge employment opportunities and skill development.

When production commences, it will be available across the country while the sellers and independent marketers will enhance the process. Ultimately, the Dangote refinery will take Nigeria to new height and transforms the economy. 

Devakumar noted that the Dangote refinery will be coming on stream soon as mechanical works will be concluded by the end of 2019, which will be followed by pre-commissioning activities, testing and commercial production.                   

Responding to a question on Lubricant with about 500 000 metric tons consumption in Nigeria annually. Devakumar said, the project is under consideration but it has not been finalized if the company will be involved in lubricant production. But, it is obvious that it might be considered owing to the size of the Nigerian market.