By Winnifred Momoh
Dangote Refinery to Run at Full Capacity with 400,000 Barrels of Crude Per Day.On Monday, a report by Bloomberg stated that The Federal Government was set to deliver up to 400,000 barrels of Nigerian crude oil daily to the Dangote refinery under its naira-for-crude agreement.
The report said, this significant development is expected to take place over the next two months, amounting to 24 million barrels of Nigerian supply between October and November 2024.
“The refinery’s enhanced processing capacity is poised to have far-reaching implications, revolutionizing both its operations and the local oil industry. This development is expected to significantly impact the region’s import and export markets, transforming the landscape of the oil sector.”
The Nigerian National Petroleum Company Limited (NNPC) will start supplying crude oil to Dangote Petroleum Refinery in naira this week. Additionally, three more refineries are expected to begin producing Premium Motor Spirit (PMS), marking significant progress in Nigeria’s oil refining capacity.
Dangote Refinery’s growing reliance on domestic crude oil will substantially reduce Nigeria’s exports, disrupting the Atlantic oil market. This shift is expected to have significant implications for global oil trade dynamics.
The 650,000-barrel-a-day plant — larger than any other in Africa or Europe — will claim 13 to 14 shipments from Nigeria’s typical monthly program of about 50 cargoes.
Dangote’s supply needs will lead to a tightened West African crude market in the fourth quarter.
According to FGE analyst Ronan Hodgson, the West African crude market is expected to become considerably tighter in fourth quarter.
Nigerian crude exports may drop below 1 million barrels per day due to Dangote Refinery’s supply needs.
Nigeria’s Oil Export Plans Face Disruption, With Some Shipments Possibly Delayed Over Next Two Months.
The scheduled volume of Nigerian oil for Dangote Refinery is substantially higher than its first-half average intake of 255,000 barrels per day.
Dangote Refinery has continued to decrease its imports of US crude oil, instead opting for domestic Nigerian supply, according to trader reports.
The Nigerian National Petroleum Corporation (NNPC) has entered into a strategic partnership with Dangote Refinery, whereby NNPC will provide crude oil supply in exchange for exclusive distribution rights to the refinery’s gasoline production.
The West African region’s reliance on imported gasoline and diesel will diminish substantially as Dangote Refinery increases production, Hodgson noted.
