Sources have provided insights into why Dangote Refinery experienced a delay in commencing diesel and jet (aviation) fuel refining. These sources point to the inability of the Nigerian National Petroleum Company (NNPC) Limited to supply the refinery with the agreed-upon 300,000 barrels of crude oil per day, as per the initial arrangement.
In September 2023, Devakumar Edwin, the Executive Director at Dangote Group, shared his ambitious plans for the refinery during an exclusive interview with S&P Global Commodity Insights. He mentioned the refinery’s target to initiate diesel and jet fuel refining by October 2023, followed by petrol refining in November 2023.
At that time, he stated that the refinery was expecting its first shipment of crude oil in the coming weeks and would start producing up to 370,000 barrels per day of diesel and jet fuel from October 2023. Additionally, he outlined the phased ramp-up plan, with the refinery reaching 650,000 barrels per day of petrol production by November 30.
Edwin eagerly expressed, “We are just waiting for the first vessel. And so as soon as it comes in, we can start.” However, as of today, October 31, the refinery has not commenced refining operations. Sources with knowledge of the situation revealed to Infostride News that the delay was primarily due to a shortage of available crude oil.
One source clarified, “It is not accurate to claim that Mr. Edwin Devakumar misled the public with the dates provided in September. Nonetheless, there have been delays in crude oil deliveries. The company is actively addressing these challenges, and we anticipate the refinery will commence refining activities shortly.”
According to these sources, the Nigerian National Petroleum Regulatory Company (NNPC) Limited has not yet fully honored its agreement with Dangote Refinery to supply 300,000 barrels of crude oil per day to the facility. Furthermore, the expected crude oil shipments scheduled for this month have not materialized for unspecified reasons, causing further delays beyond the initially projected start date.
It is worth highlighting that the Dangote refinery is technically well-prepared for refining operations. Sources suggest that the refinery can initially focus on diesel and jet fuel refining and, after a month or two, transition to refining Euro 5-standard petrol.
During the September 2023 interview with S&P Global Commodity Insights, Devakumar Edwin emphasized the possibility that, until November 2023, the NNPC might not be able to consistently supply the Dangote refinery with crude oil, leading Dangote to source oil from trading houses. Additionally, he disclosed the refinery’s intention to rely exclusively on Nigerian crude starting from November 2023.
Edwin further discussed the options for transporting refined products from the refinery, noting the availability of both road and sea transportation, capable of handling 80% and 75% of the production, respectively. Concerns about theft and vandalism of pipelines in Nigeria prompted Dangote to utilize its own pipelines connecting the refinery to single buoy moorings in its custom-built port, thus circumventing the risks associated with pipeline operations in the country.
In conclusion, Dangote Refinery’s delay in commencing diesel and jet fuel refining can be attributed to challenges related to crude oil supply, primarily stemming from the NNPC’s inability to fulfill the agreed-upon daily crude oil delivery of 300,000 barrels. The refinery remains technically prepared to start refining operations and has ambitious plans for producing various petroleum products. Despite the initial setbacks, Dangote Group is actively working to overcome these challenges and looks forward to a promising future in the petroleum industry.
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