Billionaire sets up $10bn Nigerian oil refinery

Bloomberg

Africa’s richest man, Aliko Dangote, plans to start selling gasoline, diesel and aviation fuel by early 2020 from an oil refinery he’s building near Lagos, Nigeria’s commercial capital.
The $10 billion refinery, set to be one of the world’s largest and process 650,000 barrels of crude a day, should be near full capacity
by mid-2020, Edwin Devakumar, group executive director at Dangote Industries Ltd, said in an interview at the coastal site, about an hour’s drive east of Lagos.
“People still have difficulty believing we can do it on time and within those costs,” Devakumar, 61, said. “But we believe we can. It’s something of the size that’s rarely been done before. It’s huge.”
Dangote, worth $12.4 billion according to the Bloomberg Billionaire’s Index, has said the refinery can transform Nigeria by weaning it off fuel imports and generating foreign exchange through exports. Despite being Africa’s biggest crude producer and an OPEC member, the West African nation ships in almost all its gasoline and diesel from abroad because of the decrepit state of its government-owned refineries.
Dangote’s facility will probably produce about 50 million liters (13.2 million gallons) a day of gasoline and 15 million liters of diesel, though output can be changed according to the demand for each product, Devakumar said.
While Nigeria, a country of almost 200 million people, consumes roughly 35 million liters of gasoline daily, Dangote can export surpluses, Devakumar said.
“Once we start producing, we’ll be able to meet all local demand and we’ll also be able to start
exporting,” he said.
The company has been in talks with oil traders including Royal Dutch Shell Plc, Vitol Group and Trafigura Group Pte about them supplying crude and buying refined products, according to Devakumar.
“We are establishing a rapport with them, but there’s been nothing specific so far,” he said.
The plant is designed to process light and medium grades of crude and produce fuels that meet European standards so that Dangote can sell them globally.
“We’re flexible in terms of our feedstock,” Devakumar said. “We’ll be able to use all the African crudes, American crudes and Middle Eastern crudes. We don’t want to be dependent on Nigerian crude. We won’t be able to process heavy, dirty crudes. It doesn’t make sense in today’s environment.”
Trafigura confirmed discussions had taken place. The new refinery will benefit “the West African oil market and improve fuel standards in the region,” a spokesperson said in an emailed response.
Antonia Lock, a spokeswoman for Vitol, declined to comment, while Shell spokesman Bamidele Odugbesan didn’t immediately
respond to a text message.