Nigeria’s giant new oil refinery Dangote, the largest in Africa, is set to import crude from the US in the coming months, a sign of just how competitive American barrels have become in the global market.
Trafigura Group sold 2 million barrels of WTI Midland to Dangote refinery for end-February delivery, said traders with knowledge of the matter. This is the first time that the giant refinery has purchased non-Nigerian crude, traders said.
The surge in US oil supply over the past decade has reshaped the global market, extending its impact to regions as distant as Asia. This development is critical for Nigeria, Africa’s largest economy, whose economy heavily relies on petroleum exports.
A few weeks ago, the Dangote oil refinery commenced the production of diesel and aviation fuel after facing years of construction delays at the $20 billion facility.
The refinery is obtaining domestic crude through a supply agreement with the trading arm of the state-owned Nigerian National Petroleum Co. The first crude delivery to the facility took place on December 12, 2023, and the sixth cargo was successfully delivered on January 8, 2024.
The first cargo that arrived at the plant was Nigeria’s Agbami crude, sold by a trading unit of Shell Plc. This was followed by more Nigerian barrels including the nation’s Amenam, Bonny Light and CJ Blend streams.
In addition to processing domestic feedstock, the new giant plant is designed to handle other African crudes, as well as supply from further afield, including the US and Saudi Arabia, according to statements from the Dangote Group earlier this month
The refinery is expected to commence gasoline production by March, as reported by the The Guardian over the weekend, quoting Dangote himself.
The refinery is expected to generate 27 million litres of diesel, 11 million litres of kerosene, and 9 million litres of jet fuel.