Sources have provided reasons why Dangote Refinery missed its diesel and jet (aviation) fuel refining deadline.
These sources have attributed that to the inability of the Nigerian National Petroleum Company (NNPC) Limited to supply Dangote Refinery with 300,000 barrels of crude oil per day according to an earlier agreement.
Recall that in September 2023, Devakumar Edwin, Executive Director at Dangote Group, mentioned in an exclusive interview with S&P Global Commodity Insights that the refinery aimed to begin diesel and jet fuel refining by October 2023, followed by petrol refining starting in November 2023.
At the time, he had said that the Dangote refinery would receive its first cargo of crude in the next few weeks and would begin producing up to 370,000 barrels per day of diesel and jet fuel from October 2023.
He also noted that by November 30, the refinery will start the phased ramp-up to 650,000 barrels per day of petrol.
He said:
- “We are just waiting for the first vessel. And so as soon as it comes in, we can start.”
However, as of today, October 31, the refinery has yet to commence refining activities. Sources familiar with the matter told Nairametrics that a shortage of available crude oil was the reason for this delay.
One of the sources said:
- “It is not true that Mr. Edwin Devakumar lied about the dates provided in September. However, there are some delays when it comes to crude deliveries. But the company is working to resolve these challenges and soon the refinery will begin refining activities.”
According to the sources who spoke to Nairametrics, the Nigerian National Petroleum Regulatory Company (NNPC) Limited has not yet fulfilled the agreement with Dangote Refinery for the delivery of 300,000 barrels of crude oil per day to the facility.
Also, the expected crude imports for the refinery, scheduled for this month, have not arrived for unspecified reasons, causing further delays beyond the anticipated delivery time.
It’s important to note that the Dangote refinery is technically prepared for refining.
Sources suggest the refinery can initially start with diesel and jet fuel refining and, after a month or two, move on to refining Euro 5 standards for petrol.
During the September 2023 interview with S&P Global Commodity Insights, Devakumar Edwin highlighted the fact that until November 2023, the NNPCL might not be able to supply the Dangote refinery, and as a result, Dangote would purchase oil from trading houses.
Additionally, he mentioned the refinery’s intention to rely exclusively on Nigerian crude starting from November 2023.
Edwin further mentioned the options for evacuating refined products from the refinery by road or sea capable of handling 80% and 75% of the production, respectively.
Concerns about theft and vandalism of pipelines in Nigeria prompted Dangote to use its pipelines connecting the refinery to single buoy moorings in its custom-built port, bypassing the risks associated with pipeline operations in the country. (Nairametrics)
