Dangote oil refinery set to start by 2017

A NEW $9 billion (R112bn) oil refinery producing 500 000 barrels per day being developed by Africa’s richest man, Aliko Dangote, was expected to come onstream in Nigeria by 2017, a senior Dangote Group official said yesterday.

The refinery, to be located in Lagos, will cut reliance on international markets for Africa’s largest oil producer, which imports more than 80 percent of its fuel needs.

The lack of sufficient refining capacity is a major handicap in Africa’s biggest economy.

“By the third quarter of 2017, we expect to be looking at commissioning,” Mansur Ahmed, Dangote Industries’ executive director of stakeholder management and corporate communications, said at an African refiners conference in Cape Town.

The refinery is being designed to process Nigerian crude mix and produce products conforming to Euro V fuel specifications, as fuel demands across the continent are forecast to rise rapidly with many countries enjoying strong economic growth.

Poor infrastructure, competitive global markets and financial constraints had traditionally held back Africa’s refining capacity, while fuel subsidies in Nigeria were also an issue, said Ahmed, who spoke on behalf of Aliko Dangote. He said the refinery, funded by debt and equity including a $3bn commitment from Dangote himself, could list in future should additional capital be needed.

The Dangote Group has interests ranging from cement to basic food processing to oil and gas. A boost to its refining capacity would be a blow to European refiners and oil traders. – Reuters