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Nigeria’s state oil firm NNPC Ltd will supply the new 650,000 barrel-per-day Dangote oil refinery with up to six cargoes of crude oil in December to be used in test runs, Reuters is reporting.
The refinery, funded by Africa’s richest man, Aliko Dangote, will 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.
According to Reuters, 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 other sources said about 4-5 cargoes, or at least 130,000 bpd, were planned. A Dangote Group official, who did not wish to be named, said “some of the agreements have confidentiality clauses” without elaborating when asked about the NNPC supply deal.
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.
The refinery has been designed for a wide range of crudes including most of the African crudes, a few of Middle Eastern crudes and the American Light tight oil (LTO).
The initial production capacity at the refinery will be a 27.2 million tonnes a year, or 74,538 tonnes per day, of which diesel output will be equivalent to 15,197 tonnes per day (5.54 million tonnes a year), once production ramps up, according to internal data about the refinery seen by MoneyCentral.
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