Connect with us

Click here to join NNU for free and make money while reading news and getting updates daily.


Dangote Refinery explores US for crude shipment, expecting third stock



Abdullateef Aliyu with Agency Report

The 650,000 barrels per day Dangote Petroleum Refinery has been able to ramp up production leveraging on cheaper crude imports from the United States, a report has said.

The report by Bloomberg indicated that the plant has been shipping products in recent weeks while readying two units to enable gasoline (petrol) output that will deliver a long-promised transformation of the fuel market both in Nigeria and the region.

“Dangote is going to influence Atlantic Basin gasoline markets this summer and for the rest of the year,” said Alan Gelder, Vice President of Refining, Chemicals, and Oil Markets at the consultancy firm, Wood Mackenzie as quoted in the Bloomberg report.


He added, “When the RFCC comes online, that’ll really shake things up because it alters the West African gasoline supply balance,” referring to a residue fluid catalytic cracking unit that upgrades heavier products.
The refinery is running at about 300,000 barrels per day, nearly half its capacity, according to the average estimate of analysts at WoodMac, FGE, and Citac.

“The refinery is already having a sizable impact on product markets even running in its most stripped back form at minimum rates,” said Ronan Hodgson, an energy analyst at FGE. Units that boost diesel quality will also start up in the coming months.

As much as a third of the oil shipped into the giant refinery so far has been US grade WTI Midland, according to shipping information compiled by Bloomberg. That’s likely to continue as long as the foreign oil undercuts the price of local supplies, Hodgson said.

Dangote could be about to change that.

Nigeria released new rules earlier this week that will compel its oil producers to sell crude to domestic refineries in a bid to reverse the country’s reliance on imported refined products. It’s not yet clear how much each refinery will need to take.


Earlier in January, it was reported that the $19 billion giant new oil refinery, the largest in Africa, was set set to import crude from the US, a sign of how competitive American barrels had become in the global market.

Trafigura Group sold 2 million barrels of WTI Midland to Dangote refinery for end-February delivery, the first time that the giant refinery had purchased non-Nigerian crude, traders said

Source link: Daily Trust/

Continue Reading