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How Dangote aspires to make Nigeria self sufficient in crude refining

A cross section of Dangote refineries site.

Recently, the management of Dangote Oil Refinery Company Limited, a subsidiary of Dangote Group, while conducting some select journalists in a tour of its facilities, emphasised that the company does not focus on making Nigeria self sufficient in crude refining alone, but will eventually export refined crude products to other African markets.

 

 

The management said its $9billion refinery would now come on stream by December 2017, one year ahead of an earlier December 2018 deadline.

 

The Dangote refinery, located in Lekki, Lagos State, targets delivering 600,000 barrels of refined crude oil per day (bpd).

 

The latest move to fast-track the refinery operations’ take-off date was disclosed by the Senior General Manager, Civil and Structural, Mr Madhav Kelkar, during a facility tour of the refinery by journalists in Lagos.

 

Kelkar explained that the conclusion of preliminary works at the refinery remained a major milestone, which was achieved in record time. He said the development was responsible for the shift in the take-off date.

 

The refinery will produce gasoline, diesel, aviation fuel, household kerosene, slurry as raw material for carbon black, as well as 750,000 metric tons per annum (mtpa) of polypropylene.

 

According to him, the refinery is sited on 2,500 hectares of land and is also to include a 750,000 metric tonnes of polypropylene for the petrochemicals plant and another fertilizer plant, which would produce 2.8 million metric tonnes per annum (mtpa) of urea and ammonia.

 

He insisted that Dangote oil refinery project is the first of its kind, having the longest single train refinery in the world.

 

Kelkar disclosed that Dangote in its quest to build an oil refinery, petrochemicals and fertilizer plant of world-class standard, assembled a team of top-notch engineering firms, with the largest dredging company in the world, Jan De Nul of Belgium, working on the company’s dredging works, while Trevi Foundations and Onshore Constructions are working on piling.

 Italian giant, Saipem, is handling Engineering and Procurement Contract (EPC) and Sarathy Geotech of India carrying out soil investigation.

 At the fertilizer plant site, General Manager, Dangote Fertilizer, Jaiswal Anurag, confirmed that the plant has attained 90 per cent of engineering work and that 80 per cent of equipment have arrived the country.

 Anurag also said that the contractors, Trevi Foundation, Onshore Construction, SAIPEM, TATA and Dantata & Sawoe have fully mobilised to site.

 He said the fertilizer plant is most likely going to take off before the petrochemical.

 Speaking at the level of work done at the temporary jetty, Emmanuel Chukwu, Project Engineer of Dantata & Sawoe said work on the site has attained 95 per cent completion.

 “We will complete dredging, loading and offloading facilities this month (October), and the dredging will link the facility from the lagoon to the sea. We are moving at a very high speed because we commenced work on July 2014 and this October, we shall be completing all the work,” he assured.

Kelkar, said the benefit of the project is that it will not only make Nigeria self sufficient in local refining, but will generate foreign exchange through export of refined products.

 It will be recalled that at the signing of the $3.3billion loan ceremony in Abuja on September 4, 2013, Aliko Dangote, President of Dangote Group stated, that “As an investor who believes in Nigeria, knows Nigeria well, and whose prosperity was made in Nigeria, we have responded to the challenge with our recent decision to invest over $9.0billion in a Refinery/Petrochemical and Fertilizer complex to be located at the OKLNG Free Trade zone.

 “This complex will be the largest industrial complex project ever in the history of our great nation. Funding for the project will come from a $3.3billion medium term loan, the agreement for which we are signing today and also an additional $2.25billion from the DFI’s and ECA’s to augment our equity contribution of $3.50billion.

 “The projects have effectively taken off, with the award of Engineering, Procurement and Construction (EPC) Contract to Saipem of Italy for the Fertilizer Plant. For the refinery project, the award of Basic Engineering Design and Optimisation has been made to UOP, of the Honeywell Group of USA, and award of Project Management Consultancy has been made to Engineers India Ltd, a Government of India Undertaking.”

 Recall that the United States Trade and Development Agency (USTDA) had in August 2015, signed an agreement with Dangote Group for a grant of $997,443 for the training of Dangote Oil Refining Company’s personnel, a subsidiary of the group. The USTDA grant will fund a multi-year programme to train over 100 Dangote Company staff on refinery fundamentals. Through the training, the Dangote staff will be able to operate and maintain the Greenfield Refinery in Lekki, Lagos.

 Dangote, had stated that “with our decision to invest in a $9billion 600,000 bpd refinery project, we decided to address the paradox of Nigeria being one of the world’s largest producer and exporter of crude oil but yet one of the largest importers of refined products.”

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