News in Brief:
– Dangote Industries plans to list its $20 billion refinery and $2.5 billion fertiliser plant on the NGX by March 2025, offering investment opportunities to Nigerians.
– The refinery, starting petrol production in July 2024, aims for 650,000 barrels per day capacity and $25 billion annual revenue.
Aliko Dangote, the President and CEO of Dangote Industries Limited has announced that the $20 billion Dangote Petroleum Refinery & Petrochemicals and the $2.5 billion Dangote Fertiliser will be listed on the Nigerian Exchange Group (NGX) by the end of March 2025. This move is expected to have significant implications for Nigeria’s economy and the global agricultural sector.
The listing on the NGX will allow Nigerians to own a part of these mega projects, fostering a sense of national pride and economic participation. Dangote projects that the refinery is projected to generate $25 billion annually from 2025, contributing significantly to Nigeria’s foreign exchange reserves.
Furthermore, the fertiliser plant, operating Africa’s largest granulated urea fertiliser complex, will also be listed, opening up more investment opportunities.
Petrol production and refinery capacity
Dangote has assured that petrol production will commence in July 2024, with sales starting in August. This move comes after resolving crude oil supply issues with the Nigerian government. The refinery, once operational, will be the largest single-train refinery in the world, with a capacity to process 650,000 barrels per day (bpd). A single-train refinery means that it has one integrated production line, enhancing efficiency and reducing costs compared to multi-train refineries which have multiple production lines.
Dangote’s refinery and fertiliser plant are important in Nigeria’s achievement of self-sufficiency in petroleum products and fertilisers. The refinery’s capacity will meet domestic demand and provide excess refined products for export. This is crucial for Nigeria, which has historically relied on importing refined petroleum products despite being a major crude oil producer. Self-sufficiency will reduce import dependency, save foreign exchange, and boost local industries.
Boosting local capacity and employment
The refinery boasts a storage capacity of 4.5 billion liters, sufficient to cover 20 days of Nigeria’s crude requirement and 15 days of petrol consumption. It includes dedicated loading gantries with 86 loading bays and specialised marine facilities for crude offloading and product loading. Additionally, it features a 900-kilotonne per annum polypropylene plant, producing vital industrial materials such as sulphur and carbon black.
Dangote Industries Limited has emphasised local content in its projects, employing young Nigerians and equipping them with critical skills. The construction of the refinery by a Nigerian company as the Engineering, Procurement, and Construction (EPC) contractor is a significant achievement, demonstrating local engineering and construction capabilities. This has created thousands of direct and indirect jobs, contributing to local economic development.
Revenue generation and forex inflow
Dangote advocates for reduced importation to avoid impoverishing the nation and to enhance competitiveness. By manufacturing locally, Nigeria can grow its economy and compete globally. The immediate impact of the refinery’s operations has been seen in the reduction of diesel prices, showcasing the potential benefits of local production.
Dangote Group aims to become a leading supplier of foreign exchange in the market, targeting $30 billion in revenues by 2025. This strategic shift will reduce reliance on the Central Bank of Nigeria for forex, potentially stabilising and strengthening the Naira. The increased inflow of forex through Dangote’s businesses will bolster the value of Nigeria’s currency on the international stage.
