Why Dangote Refinery is Delaying Production as Five Modular Refineries Take-Off
- The Dangote Refinery has again missed its production deadline after promising to begin October 2023
- It was gathered that the lack of crude oil supply to the facility was responsible for the delay
- About five other modular refineries are said to be ready to commence production but lack adequate feedstock
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The failure to supply crude oil to domestic refineries, including the Dangote Refinery, has delayed production.
The development comes as the Dangote Refinery failed to meet its October production deadline.
Source: Getty Images
Dangote refinery misses production deadline twice in one year
This is the second time the refinery has missed its production date in 2023 since it was commissioned on May 22, 2023.
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Industry observers said the failure of the refinery take-off has dashed the hopes of Nigeria, who expected the project to end petrol imports.
Punch reported that domestic refineries are being starved of crude oil supply, which would have helped to cushion the impact of petrol import amid Forex scarcity.
About five modular refineries have commenced production of refined petroleum products but need more crude oil to produce the commodity.
According to sources, the Dangote Refinery still needs to receive crude oil to begin production.
Dangote refinery confirms crude oil import
The Executive Director of the Dangote Group, Devakumar Edwin, has said that the Dangote refinery was importing crude oil and was expecting its first cargo in two weeks.
In an interview with S&P Global Commodity Insight, Edwin revealed that NNPC had promised its crude to other entities.
Legit.ng earlier reported that the NNPC had entered into a crude oil swap deal with the Afreximbank for a $3 billion facility.
The Dangote refinery boss said that crude oil import by the facility was temporary as it would receive supply from NNPCL from November 2023.
Edwin also revealed that the company would begin the production of 370,000 barrels daily of crude that would produce diesel and aviation fuel in October 2023.
He stated that the facility would commence petrol production by November 2023.
The company seems to have missed the deadline again this year despite Dangote promising at the facility’s commissioning that it would begin production at the end of July or the beginning of August.
As of Wednesday, November 1, 2023, the facility has yet to receive any crude oil supply required for production.
Five modular refineries begin production as FG moves to enforce crude supplies
Legit.ng earlier reported that the Nigerian government mandated local oil firms to ensure an adequate supply of crude oil to local refineries before export.
Other modular refineries confirmed that International Oil Companies (IOCs) prefer exporting their crude to earn dollars than supply to domestic refineries.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) announced on Saturday, October 28, 2023, that more local refineries had issued notices to commence production of petroleum products.
The Commission revealed its plan to enforce crude oil supply to the local refineries.
Two new refineries begin production in Edo, place orders for 300,000 barrels of crude
Earlier, Legit.ng reported that the Edo Refinery and Duport Midstream Refinery have started refining petrochemical products in the state and would start petrol refining as soon as they receive crude oil supplies.
The Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote, had said the two new refineries in Edo State are poised to contribute to Nigeria's 1.5 million barrels of daily refining capacity.
Source: Legit.ng
