The President and Chief Executive of Dangote Group, Alhaji Aliko Dangote, has stated that his $20bn Dangote Petroleum Refinery was built to use Nigerian crude and add value to it within the country.
Dangote, who stated this in a statement issued by the refinery on Thursday, asked why should the plant deviate from this focus, as he admitted that the refinery had also been refining crude oil grades from Europe, the United States, and other countries.
Africa’s wealthiest man further noted that the domestic crude oil supply issues in Nigeria were being resolved by the parties involved.
The statement said the refinery has already affected crude flows, with dozens of Nigerian cargoes remaining in-country and US WTI Midland, a comparable light, sweet grade, being imported. It said the mega-refinery could therefore tighten the light, sweet crude market.
“Its diet is WTI and the lighter Nigerian (crudes) so if you were chasing those barrels you’d probably feel it quite keenly,” the statement stated that a West African crude trader told Commodity Insights.
It said WTI Midland crude initially emerged as the favoured feedstock to supplement Nigerian supply, with the refinery signing long-term supply contracts for the US grade and noting its competitive pricing.
It stated that crude flows in and out of the Dangote refinery have been felt in other markets, especially in Europe, the largest consumer of light, sweet Nigerian crude.
“The US grade has accounted for 30 per cent of crude delivered to Dangote, through 18 cargoes,” the multi-billion dollar company stated in the statement.
It said Dangote stated that the facility would broaden the refinery’s feedstock sources with Libyan, Angolan, and Brazilian crude.
“The refinery was built to use Nigerian crude and add value to it within Nigeria. Why should we deviate from that focus?” Dangote stated, adding that the crude supply issues were “getting resolved”, but that the refinery remained open to all opportunities “to supplement it”.
“Dangote refinery is designed to process a range of light and medium grades of crude oil, including Nigerian grades,” said Rasool Barouni, Associate Director and head of Refining at S&P Global Commodity Insights. “Other similar grades including other WAF grades could be an option.”
