Lagos — The Nigerian National Petroleum Company Limited, NNPC, will supply the much-awaited 650,000 barrel-per-day Dangote oil refinery with up to six cargoes of crude oil in December for its take-off.
This will be used to test run the plant, Reuters reports, citing three industry sources with knowledge of the matter.
The refinery, funded by Africa’s richest man, Aliko Dangote, and commissioned in May by then outgoing Nigeria’s president, Muhammadu Buhari, was to have commenced operations in August but NNPC’s failure to supply crude for its take off put paid to the plan.
The take off of the plant in December will, according to Reuters, transform oil trading in the Atlantic Basin and remove a lucrative outlet for fuels produced in Europe and the United States that have for years powered the cars, trucks and generators on the continent.
The refinery is in the Lekki free trade zone near Lagos. Once it is fully up and running, it will turn oil powerhouse Nigeria into a net exporter of fuels, a long-sought goal for the OPEC member that is currently almost totally reliant on imports.
One of the sources, an NNPC official, who declined to be named, specified six cargoes, or 200,000 bpd, would be supplied in December as part of a one-year deal, adding that volumes in future months would be supplied “based on mutual agreement and availability”.
The NNPC official said gasoline and diesel purchases from the refinery would be negotiated in separate contracts at a later date. NNPC has a 20% stake in the refinery.
Jeremy Parker, the head of business development for Africa-focused oil consultancy CITAC, said the value of the fuels the refinery produced would gradually improve as it approached full capacity, according to Reuters.
“You’d need to keep feeding (the refinery) at a rate of around 325,000 bpd, which is about 10 cargoes a month,” Parker said. “Once they ramp up in subsequent phases to 650,000 bpd, that figure climbs of course, but initially they’d be expected to run around 325,000 bpd.”
